Biomarin Pharmaceutical Inc – ‘DEFM14A’ on 7/3/02

On:  Wednesday, 7/3/02, at 5:50pm ET   ·   As of:  7/5/02   ·   Accession #:  898430-2-2533   ·   File #:  0-26727

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Definitive Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Special Proxy Statement                   329   1.61M 

Document Table of Contents

DEFM14A
1st Page of 329
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
SCHEDULE 14A  
INFORMATION REQUIRED IN PROXY STATEMENT 
SCHEDULE 14A INFORMATION  

Proxy Statement Pursuant to Section 14(a) of  
the Securities Exchange Act of 1934 

                                                                [Download Table]
                                                                             
Filed by the Registrant  [X]                                                 

Filed by a Party other than the                                              
Registrant  [_]                                                              

[X] Definitive Proxy Statement                                               

Check the appropriate box:                                                   

[_] Preliminary Proxy Statement          [_] Confidential, for Use of the    
                                             Commission Only (as permitted by
[_] Definitive Proxy Statement               Rule 14a-6(e)(2))               

[_] Definitive Additional Materials                                          

[_] Soliciting Material Pursuant to                                          
    (S)240.14a-12                                                            

BIOMARIN PHARMACEUTICAL INC.  
(Name of Registrant as Specified In Its Charter)  

(Name of Person(s) Filing Proxy Statement if other than Registrant) 

Payment of Filing Fee (Check the appropriate box):                              

[_] No fee required                                                             

[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.    

(1) Title of each class of securities to which transaction applies: Common
Shares of Glyko Biomedical Ltd.                                   

 (2) Aggregate number of securities to which transaction applies: 34,352,823

(3) Per unit price or other underlying value of transaction computed      
   pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):        

34,352,823      --  No. of Glyko common shares              
multiplied by,                                              
U.S.$2.76       --  Average of the high and low prices      
                  reported on the Toronto Stock Exchange
                  for Glyko common shares (Cdn.$4.40) on
             April 8, 2002, adjusted to a U.S.
                    dollar equivalent (exchange rate 0.6273)
U.S.$94,813,791                                             

(4) Proposed maximum aggregate value of transaction: $94,813,791          

(5) Total fee paid: $18,963                                               

[X] Fee paid previously with preliminary materials.                             

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule 
0-11(a)(2) and identify the filing for which the offsetting fee was paid
  previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                     

(1) Amount Previously Paid:                                               

(2) Form, Schedule or Registration Statement No.:                         

(3) Filing Party:                                                         

(4) Date Filed:                                                           

DEFM14A
2nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 2nd
   [LOGO] BIOMARIN       [LOGO] Glyko Medical logo
PHARMACEUTICAL INC                                    

JOINT PROXY STATEMENT AND 

MANAGEMENT PROXY CIRCULAR 

WITH RESPECT TO AN ARRANGEMENT INVOLVING  

BIOMARIN PHARMACEUTICAL INC., 

BIOMARIN ACQUISITION (NOVA SCOTIA) COMPANY  

AND 

GLYKO BIOMEDICAL LTD. 

JULY 5, 2002  

DEFM14A
3rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 3rd
BIOMARIN PHARMACEUTICAL INC.  
371 Bel Marin Keys Boulevard, Suite 210 
Novato, California 94949  

July 5, 2002  

Dear BioMarin Pharmaceutical Inc. Stockholder:                                  

You are cordially invited to attend the annual meeting of the stockholders
of BioMarin Pharmaceutical Inc. ("BioMarin") to be held on August 13, 2002 at   
10:00 a.m. (California time), at Embassy Suites Hotel located at 101 McInnis    
Parkway, San Rafael, California 94903.                                          

  The purpose of the annual meeting is to consider and vote upon proposals to:
(i) elect six directors of BioMarin; (ii) approve a transaction between         
BioMarin and Glyko Biomedical Ltd. ("Glyko") by way of a Plan of Arrangement    
under the Canada Business Corporations Act; and (iii) transact such other       
business as properly may be brought before the BioMarin annual meeting or any   
adjournment or postponement thereof. If the transaction involving Glyko is      
completed, each Glyko common share will be exchanged for 0.3309 of a share of   
BioMarin common stock and Glyko will become an indirect, wholly-owned           
subsidiary of BioMarin. Up to 11,367,617 shares of BioMarin common stock will   
be issued to Glyko shareholders in connection with the transaction. Upon        
completion of the transaction, the Glyko shareholders will own approximately    
21.3% of the outstanding shares of BioMarin common stock based on the number of 
issued and outstanding shares of BioMarin common stock as of June 27, 2002.     
Following completion of the transaction, BioMarin intends to exchange the       
11,367,617 shares of BioMarin common stock owned by Glyko for shares of Series  
A Preferred Stock of BioMarin and to cancel such 11,367,617 shares of BioMarin  
common stock. After careful consideration, BioMarin's board of directors has    
approved the transaction.                                                       

  The attached document serves as a (1) BioMarin proxy statement and (2) Glyko
management proxy circular. It provides detailed information concerning          
BioMarin, Glyko, the proposals to be considered and voted upon at the annual    
meeting and the transaction. Please give all of the information contained in    
the attached document your careful attention. In particular, you should         
carefully consider the discussion in the section entitled "Risk Factors" of the 
attached document.                                                              

BioMarin's board of directors recommends that you vote FOR the election of
each of the nominees to the board of directors.                                 

In addition, disinterested members of BioMarin's board of directors have  
unanimously approved the transaction between BioMarin and Glyko. The board      
recommends that you vote FOR the transaction. If the transaction is not         
approved, it cannot be completed.                                               

 YOUR VOTE IS IMPORTANT. Even if you do not attend the annual meeting, it is
important that your shares be voted. Please vote by promptly completing and     
mailing the enclosed BioMarin proxy card so that your shares will be            
represented at the annual meeting and voted as you wish.                        

              Sincerely,

                        /s/ Fredric D. Price
                    Fredric D. Price
                                        Chairman and Chief Executive Officer

This document is dated July 5, 2002 and is being first mailed to the      
stockholders of BioMarin on or about July 8, 2002.                              

DEFM14A
4th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 4th
GLYKO BIOMEDICAL LTD. 
199 Bay Street  
Toronto, Ontario M5L 1A9  

July 5, 2002  

To the Shareholders of Glyko Biomedical Ltd.:                                   

  After careful consideration, the board of directors of Glyko Biomedical Ltd.
("Glyko") has approved a transaction between BioMarin Pharmaceutical Inc.       
("BioMarin") and Glyko by way of a Plan of Arrangement under Section 192 of the 
Canada Business Corporations Act. If the arrangement is completed, each Glyko   
common share will be exchanged for 0.3309 of a share of BioMarin common stock   
and Glyko will become an indirect, wholly-owned subsidiary of BioMarin. In      
connection with the arrangement, it is proposed that Glyko be continued under   
the British Columbia Company Act. BioMarin common stock is traded on Nasdaq and 
the Swiss SWX New Market under the trading symbol "BMRN." On June 28, 2002, the 
closing price of the BioMarin common stock as reported on Nasdaq was U.S. $5.22 
per share. On the basis of such closing price, 0.3309 of a share of BioMarin    
common stock has a value of U.S. $1.72. Up to 11,367,617 shares of BioMarin     
common stock will be issued to Glyko shareholders in connection with the        
transaction. This is the same number of shares of BioMarin common stock as is   
currently owned by Glyko. Following completion of the transaction, BioMarin     
intends to exchange the 11,367,617 shares of BioMarin common stock owned by     
Glyko for Series A Preferred Stock of BioMarin and to cancel such 11,367,617    
shares of BioMarin common stock.                                                

The Joint Proxy Circular serves as a (1) BioMarin proxy statement and (2) 
Glyko management proxy circular. It provides detailed information concerning    
BioMarin, Glyko, the arrangement and the proposals related to the transaction.  
Please give all of the information contained in the Joint Proxy Circular your   
careful attention. In particular, you should carefully consider the discussion  
in the section of the Joint Proxy Circular entitled "Risk Factors."             

Shareholders of Glyko are cordially invited to attend a special meeting to
vote on the arrangement and the continuance of Glyko under the laws of British  
Columbia. The special meeting of Glyko shareholders will be held on August 15,  
2002 at 10:00 a.m. (Toronto time) at the offices of Blake, Cassels & Graydon    
LLP, 199 Bay Street, Suite 2300, Commerce Court West, Toronto, Ontario M5L 1A9. 
Only holders of Glyko common shares who hold such shares at the close of        
business on July 4, 2002 will be entitled to receive notice of and to attend in 
person, or appoint a proxy nominee to attend, and vote at this special meeting. 

The Glyko board of directors has unanimously approved the transaction. The
board recommends that you vote FOR the transaction. If the transaction is not   
approved, it cannot be completed.                                               

 YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Glyko special
meeting, please complete, sign, date and return the accompanying Glyko proxy in 
the enclosed self-addressed stamped envelope. Returning the proxy does not      
deprive you of your right to attend the meeting and to vote your shares in      
person. Thank you for your consideration of this matter.                        

              Sincerely,

                    /s/ Joerg Gruber
                Joerg Gruber
            Chairman

DEFM14A
5th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 5th
BIOMARIN PHARMACEUTICAL INC.  

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS  

TO BE HELD ON AUGUST 13, 2002 

TO THE STOCKHOLDERS OF BIOMARIN PHARMACEUTICAL INC.:                            

NOTICE IS HEREBY given that the annual meeting of the stockholders of     
BioMarin Pharmaceutical Inc. ("BioMarin") will be held at Embassy Suites Hotel  
located at 101 McInnis Parkway, San Rafael, California 94903, on August 13,     
2002 at 10:00 a.m. (California time), for the following purposes:               

1. To elect six directors of BioMarin;                                  

2. To consider and vote upon a proposal to approve a transaction for    
BioMarin to acquire all of the outstanding Glyko Biomedical Ltd.  
    ("Glyko") common shares including, without limitation, the issuance of
     up to 11,367,617 shares of BioMarin common stock in connection with the
transaction; and                                                  

3. To transact such other business as properly may be brought before the
annual meeting or any adjournment or postponement thereof.        

 The foregoing items of business are more fully described in the Joint Proxy
Circular accompanying this notice.                                              

BioMarin, BioMarin Acquisition (Nova Scotia) Company and Glyko will not be
able to complete the transaction involving Glyko if the BioMarin stockholders   
do not approve the transaction including, without limitation, the issuance of   
shares of BioMarin common stock in connection with the transaction.             

BioMarin stockholders of record as of the close of business on June 27,   
2002, will be entitled to notice of and to vote at the annual meeting. A        
BioMarin stockholders' list will be available on July 8, 2002, and may be       
inspected during normal business hours prior to the annual meeting at the       
offices of BioMarin, 371 Bel Marin Keys Boulevard, Suite 210, Novato,           
California 94949.                                                               

All BioMarin stockholders are cordially invited to attend the annual      
meeting. To ensure your representation at the annual meeting, however, you are  
urged to complete, date, sign and return the enclosed BioMarin proxy as         
promptly as possible. A postage-prepaid envelope is enclosed for that purpose.  
Any BioMarin stockholder attending the annual meeting may vote in person even   
if that stockholder has returned a proxy.                                       

                                             By Order of the Board of Directors,

                                  /s/ Christopher M. Starr

                                     Christopher M. Starr, Ph.D.
                   Secretary

July 5, 2002                                                                    

DEFM14A
6th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 6th
GLYKO BIOMEDICAL LTD. 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 

TO BE HELD ON AUGUST 15, 2002 

TO THE HOLDERS OF COMMON SHARES OF GLYKO BIOMEDICAL LTD.:                 

A special meeting of the holders of common shares of Glyko Biomedical Ltd.
will be held at the offices of Blake, Cassels & Graydon LLP, 199 Bay Street,    
Suite 2300, Commerce Court West, Toronto, Ontario M5L 1A9, on August 15, 2002   
at 10:00 a.m. (Toronto time) for the following purposes:                        

1. to consider, pursuant to an interim order of the Superior Court of   
     Justice (Ontario) dated July 2, 2002, and if deemed advisable, to pass,
with or without variation, a special resolution to approve an     
   arrangement under Section 192 of the Canada Business Corporations Act
   involving the indirect acquisition by BioMarin Pharmaceutical Inc. of
all the issued and outstanding common shares of Glyko;            

 2. if the special resolution approving the above-mentioned arrangement is
      approved, to consider, and if deemed advisable, to pass, with or without
 variation, a special resolution to approve the continuance of Glyko
under the laws of British Columbia; and                           

 3. to transact such further or other business as may properly come before
the meeting or any adjournment or postponement thereof.           

  Glyko will not proceed with the arrangement transaction unless the requisite
majority of shareholders passes both the arrangement resolution and the         
continuance resolution. The arrangement is described in the accompanying Joint  
Proxy Circular which serves as a circular in connection with Glyko management's 
solicitation of proxies and as a proxy statement under applicable U.S.          
securities laws for BioMarin in connection with the approval of the transaction 
including the issuance of shares of BioMarin common stock under the             
arrangement. The full text of the Glyko arrangement resolution is set out as    
Annex C to the attached document. The full text of the Glyko continuance        
resolution is set out as Annex D to the attached document. Glyko's notice of    
application for the interim order and for a final order approving the           
arrangement and the full text of the interim order is set out as Annex E to the 
attached document.                                                              

 Pursuant to the interim order, registered holders of common shares of Glyko
may dissent in respect of the Glyko arrangement resolution. Pursuant to Section 
190 of the Canada Business Corporations Act, registered holders of common       
shares of Glyko may dissent in respect of the Glyko continuance resolution. If  
the arrangement or the continuance becomes effective, dissenting Glyko          
registered shareholders who comply with the dissent procedures (which are       
described in the circular under the heading "Dissenting Shareholder Rights")    
will be entitled to be paid the fair value of their common shares of Glyko.     
Failure to comply strictly with such dissent procedures may result in the loss  
or unavailability of any right to dissent.                                      

Glyko shareholders who do not expect to attend the meeting in person are  
requested to complete, sign, date and return the enclosed form of Glyko proxy   
in the enclosed envelope or by facsimile to Glyko Biomedical Ltd., c/o          
Computershare Trust Company of Canada, Proxy Department, 100 University Avenue, 
9/th/ Floor, Toronto, Ontario, Canada M5J 2Y1, facsimile number (416) 981-9800. 
The form of proxy must be received by Computershare Trust Company of Canada     
prior to 5:00 p.m. (Toronto time) on August 13, 2002 or, in the event that the  
meeting is adjourned or postponed, prior to 5:00 p.m. (Toronto time) on the     
second business day prior to the day fixed for the adjourned or postponed       
meeting.                                                                        

DATED at London, England, the 5th day of July, 2002.                      

                                                           By order of the Board

                                                            /s/ Joerg Gruber

                                                  Joerg Gruber
                                              Chairman

DEFM14A
7th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 7th
BIOMARIN PHARMACEUTICAL INC. AND GLYKO BIOMEDICAL LTD.  

JOINT PROXY STATEMENT AND MANAGEMENT PROXY CIRCULAR 

This Joint Proxy Statement and Management Proxy Circular ("Joint Proxy    
Circular") is being furnished to holders of common stock, par value U.S.$0.001  
per share, of BioMarin Pharmaceutical Inc., a corporation existing under the    
laws of Delaware, in connection with the solicitation of proxies by the         
BioMarin board of directors for use at the annual meeting of the stockholders   
of BioMarin to be held at 10:00 a.m. (California time) on August 13, 2002 at    
Embassy Suites Hotel located at 101 McInnis Parkway, San Rafael, California     
94903, or any adjournment or postponement thereof.                              

This Joint Proxy Circular is also being furnished to holders of common    
shares of Glyko Biomedical Ltd., a corporation existing under the laws of       
Canada, in connection with the solicitation of proxies by the Glyko board of    
directors for use at the Glyko special meeting to be held at 10:00 a.m.         
(Toronto time) on August 15, 2002, at the offices of Blake, Cassels & Graydon   
LLP, 199 Bay Street, Suite 2300, Commerce Court West, Toronto, Ontario M5L 1A9, 
Canada, or any adjournment or postponement thereof.                             

All information in this Joint Proxy Circular, including the annexes,      
concerning BioMarin and BioMarin Acquisition (Nova Scotia) Company has been     
supplied by BioMarin, and all information in this Joint Proxy Circular,         
including the annexes, concerning Glyko has been supplied by Glyko. The         
information concerning BioMarin after the completion of the transaction,        
including pro forma financial information, has been jointly provided by         
BioMarin and Glyko.                                                             

SEE THE SECTION OF THIS JOINT PROXY CIRCULAR ENTITLED "RISK FACTORS"      
BEGINNING ON PAGE 22 FOR CONSIDERATIONS RELEVANT TO APPROVAL OF THE PROPOSALS.  

No person is authorized to give any information or to make any            
representation not contained in this Joint Proxy Circular and, if given or      
made, such information or representation should not be relied upon as having    
been authorized. This Joint Proxy Circular does not constitute an offer to      
sell, or a solicitation of an offer to purchase, any securities, or the         
solicitation of a proxy, by any person in any jurisdiction in which such an     
offer or solicitation is not authorized or in which the person making such      
offer or solicitation is not qualified to do so or to any person to whom it is  
unlawful to make such an offer or solicitation of an offer or proxy             
solicitation. Neither the delivery of this Joint Proxy Circular nor any         
distribution of the securities referred to in this Joint Proxy Circular shall,  
under any circumstances, create an implication that there has been no change in 
the information set forth herein since the date of this Joint Proxy Circular.   

Neither the Ontario Securities Commission nor the U.S. Securities and     
Exchange Commission nor any provincial, state or other securities commission    
has approved or disapproved of these securities or passed upon the adequacy or  
accuracy of the Joint Proxy Circular. Any representation to the contrary is a   
criminal offense.                                                               

DEFM14A
8th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 8th
TABLE OF CONTENTS 

                                                        [Enlarge/Download Table]

                                                                                                 Page
                                                                                                 ----
                                                                                                     

SUMMARY.........................................................................................   1 

COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA.............................................  18 

COMPARATIVE MARKET PRICE AND TRADING VOLUME INFORMATION.........................................  19 

EXCHANGE RATES..................................................................................  20 

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS                                   
  DOCUMENT......................................................................................  21 

RISK FACTORS....................................................................................  22 

   Risks Relating to the Transaction Generally - For Consideration by BioMarin Stockholders and      
     Glyko Shareholders.........................................................................  22 

   Risks Relating to BioMarin - For Consideration by Glyko Shareholders.........................  24 

   Risk Relating to Glyko - For Consideration by BioMarin Stockholders..........................  37 

   Risk Regarding Arthur Andersen LLP - For Consideration by BioMarin Stockholders and Glyko         
     Shareholders...............................................................................  37 

THE ANNUAL MEETING OF BIOMARIN STOCKHOLDERS.....................................................  38 

   General......................................................................................  38 

   Date, Time and Place.........................................................................  38 

   Purpose of the Annual Meeting................................................................  38 

   Record Date for the Annual Meeting...........................................................  38 

   Vote Required................................................................................  38 

   Quorum.......................................................................................  39 

   Voting of Proxies at Annual Meeting and Revocability of Proxies..............................  39 

   Solicitation of Proxies and Expenses.........................................................  40 

   Dissenters' or Appraisal Rights..............................................................  40 

   Submission of Stockholder Proposals for 2003 Annual Meeting..................................  40 

   Auditors.....................................................................................  40 

   Other Matters................................................................................  41 

   Additional Information on Proposals for the Annual Meeting...................................  41 

   Contact for Questions and Assistance in Voting...............................................  45 

THE SPECIAL MEETING OF GLYKO SHAREHOLDERS.......................................................  46 

   General......................................................................................  46 

   Date, Time and Place.........................................................................  46 

   Purpose of the Special Meeting...............................................................  46 

   Record Date for Special Meeting..............................................................  46 

   Vote Required................................................................................  46 

   Quorum.......................................................................................  47 

   Non-Registered Shareholders..................................................................  47 

   Voting of Proxies at Special Meeting and Revocation of Proxies...............................  47 

i 

DEFM14A
9th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 9th
TABLE OF CONTENTS--(Continued)  

                                                        [Enlarge/Download Table]

                                                                                                Page
                                                                                                ----
                                                                                                    

   Solicitation of Proxies and Expenses........................................................  48 

   Dissenting Shareholder Rights...............................................................  48 

   Shareholder Proposals.......................................................................  49 

   Independent Auditors........................................................................  49 

   Other Matters...............................................................................  49 

   Recommendation of the Glyko Board of Directors..............................................  49 

   Contact for Questions and Assistance in Voting..............................................  49 

THE TRANSACTION................................................................................  50 

   General.....................................................................................  50 

   Treatment of Stock Options..................................................................  51 

   Background of the Transaction...............................................................  51 

   Joint Reasons for the Transaction...........................................................  53 

   Recommendation of BioMarin's Board of Directors.............................................  54 

   Opinion of BioMarin's Financial Advisor.....................................................  57 

   Recommendation of Glyko's Board of Directors................................................  60 

   Opinion of Glyko's Financial Advisor........................................................  62 

   Interests of Certain Persons in the Transaction.............................................  66 

   Share Ownership of Directors and Executive Officers and Certain Related Persons of BioMarin.  67 

   Share Ownership of Directors and Executive Officers of Glyko................................  67 

   Court Approval of the Arrangement and Completion of the Transaction.........................  67 

   Continuance.................................................................................  68 

   Accounting Treatment........................................................................  69 

   Contingent Capital Gains Tax Liability to BioMarin..........................................  69 

   Stock Exchange Listings.....................................................................  70 

   Regulatory Matters..........................................................................  70 

   Exemption from Registration Requirements of Securities Laws and Limitations on Resale of         
     BioMarin Common Stock.....................................................................  70 

   Delisting and Deregistration of Glyko Common Shares After the Transaction...................  72 

   Termination of Ongoing Reporting Obligations................................................  72 

   Other Agreements............................................................................  72 

   Expenses....................................................................................  73 

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES.................................................  74 

SELECTED CONSOLIDATED FINANCIAL DATA...........................................................  75 

   BioMarin Selected Consolidated Financial Data...............................................  75 

   BioMarin Supplemental Financial Data........................................................  76 

   Glyko Selected Financial Data...............................................................  78 

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS..........................................  81 

ii  

DEFM14A
10th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 10th
TABLE OF CONTENTS--(Continued)  

                                                                [Download Table]

                                                                        Page
                                                                        ----
                                                                            

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS.........  84 

PRO FORMA CAPITALIZATION OF BIOMARIN...................................  86 

THE ACQUISITION AGREEMENT..............................................  87 

   Structure of the Arrangement........................................  87 

   Completion and Effectiveness of the Arrangement.....................  87 

   Exchange of Shares under the Arrangement............................  87 

   Fractional Shares...................................................  88 

   Representations and Warranties of Glyko.............................  88 

   Representations and Warranties of BioMarin and BioMarin Nova Scotia.  89 

   Glyko's Conduct of Business Before Completion of the Arrangement....  90 

   Glyko Shareholder Approval and BioMarin Stockholder Approval........  91 

   Material Covenants..................................................  91 

   Conditions to Completion of the Arrangement.........................  93 

   Termination of the Acquisition Agreement............................  95 

   Payment of Termination Fee..........................................  95 

   Extension, Waiver and Amendment of the Acquisition Agreement........  96 

   Expenses............................................................  96 

TRANSACTION MECHANICS..................................................  97 

   The Arrangement.....................................................  97 

   The Continuance.....................................................  97 

   Share Certificates..................................................  97 

   Fractional Shares...................................................  98 

   Rights of Dissent...................................................  98 

   Withholding Rights..................................................  98 

BIOMARIN CAPITAL STOCK................................................. 100 

   BioMarin Preferred Stock............................................ 100 

   BioMarin Common Stock............................................... 100 

GLYKO SHARE CAPITAL.................................................... 100 

   Common Shares....................................................... 100 

   Preference Shares................................................... 100 

THE COMPANIES AFTER THE TRANSACTION.................................... 101 

   General............................................................. 101 

   Directors and Officers.............................................. 101 

   Pro Forma Security Ownership of Certain Beneficial Owners........... 101 

   Dividend Policy..................................................... 102 

   Independent Auditors................................................ 102 

   Transfer Agent and Registrar........................................ 102 

iii 

DEFM14A
11th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 11th
TABLE OF CONTENTS--(Continued)  

                                                                [Download Table]

                                                                     Page
                                                                     ----
                                                                         

BUSINESS OF BIOMARIN................................................ 103 

   Overview......................................................... 103 

   Recent Developments.............................................. 104 

   BioMarin's Strategy.............................................. 107 

   Manufacturing.................................................... 108 

   Sales and Marketing.............................................. 108 

   Patents and Proprietary Rights................................... 108 

   Government Regulation............................................ 109 

   Competition...................................................... 110 

   Employees........................................................ 111 

   Directors of BioMarin............................................ 111 

   Executive Officers and Other Significant Employees of BioMarin... 112 

   Security Ownership Of Certain Beneficial Owners.................. 114 

   Executive and Director Compensation.............................. 116 

   Report of Audit Committee........................................ 123 

   Report of Compensation Committee................................. 124 

   Performance Graph................................................ 126 

   Certain Relationships and Related Transactions................... 126 

   Legal Proceedings................................................ 127 

   Auditors, Registrar and Transfer Agent........................... 127 

BIOMARIN MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION     
  AND RESULTS OF OPERATIONS......................................... 128 

   Overview......................................................... 128 

   Results of Operations............................................ 128 

   Liquidity and Capital Resources.................................. 132 

   New Accounting Pronouncements.................................... 135 

   Critical Accounting Policies..................................... 135 

   Quantitative and Qualitative Disclosure about Market Risk........ 137 

BUSINESS OF GLYKO................................................... 138 

   Overview......................................................... 138 

   Security Ownership of Certain Beneficial Owners and Management... 138 

   Management of Glyko.............................................. 140 

   Meetings of the Board and its Committees......................... 141 

   Audit Committee.................................................. 142 

   Compensation of Directors........................................ 142 

   Directors' and Officers' Insurance............................... 142 

   Section 16(a) Beneficial Ownership Reporting Compliance.......... 142 

iv  

DEFM14A
12th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 12th
TABLE OF CONTENTS--(Continued)  

                                                        [Enlarge/Download Table]

                                                                                          Page
                                                                                          ----
                                                                                              

   Executive Compensation................................................................ 143 

   Stock Option Plan..................................................................... 143 

   Fiscal 2001 Option Grants............................................................. 144 

   Options Exercises/Fiscal Year Ended Value............................................. 144 

   Employment Contracts and Termination of Employment and Change of Control Arrangements. 144 

   Performance Graph..................................................................... 145 

   Certain Relationships and Related Transactions........................................ 145 

GLYKO MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                         
  RESULTS OF OPERATIONS.................................................................. 146 

   Overview.............................................................................. 146 

   Results of Operations................................................................. 146 

   Liquidity and Capital Resources....................................................... 148 

   Summary of Significant Accounting Policies............................................ 148 

   Quantitative and Qualitative Disclosure about Market Risk............................. 149 

TAX CONSIDERATIONS FOR GLYKO SECURITYHOLDERS............................................. 150 

   Canadian Tax Considerations for Glyko Shareholders.................................... 150 

   Glyko Shareholders Resident in Canada................................................. 151 

   Glyko Shareholders Not Resident in Canada............................................. 154 

   United States Federal Income Tax Considerations for Glyko Shareholders................ 155 

   U.S. Federal Income Tax Consequences to U.S. Holders.................................. 156 

   U.S. Federal Income Tax Consequences to Non-U.S. Holders.............................. 158 

   Backup Withholding and Information Reporting.......................................... 159 

COMPARISON OF SHAREHOLDER RIGHTS......................................................... 161 

   Voting Rights......................................................................... 161 

   Required Vote for Extraordinary Transactions.......................................... 161 

   Vote Required for Ordinary Transactions; Quorum....................................... 162 

   Cumulative Voting..................................................................... 162 

   Calling a Stockholders' Meeting....................................................... 162 

   Amendment of Certificate of Incorporation or Articles of Incorporation................ 163 

   Amendment of Bylaws................................................................... 163 

   Dissenters' Appraisal Rights.......................................................... 163 

   Oppression Remedy..................................................................... 164 

   Shareholder Derivative Actions........................................................ 165 

   Director Qualifications............................................................... 165 

   Election of Directors................................................................. 166 

   Fiduciary Duties of Directors......................................................... 166 

   Removal of Directors.................................................................. 166 

v   

DEFM14A
13th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 13th
TABLE OF CONTENTS--(Continued)  

                                                                [Download Table]

                                                                  Page 
                                                                  -----
                                                                       

   Filling Vacancies on the Board of Directors...................   166

   Stockholder Action by Written Consent.........................   167

   Indemnification of Officers and Directors.....................   167

   Director Liability............................................   168

   Anti-Takeover Provisions and Interested Stockholders..........   168

   Transactions with Interested Directors or Officers............   169

DISSENTING SHAREHOLDER RIGHTS....................................   170

   BioMarin......................................................   170

   Glyko.........................................................   170

LEGAL MATTERS....................................................   173

EXPERTS..........................................................   173

WHERE YOU CAN FIND ADDITIONAL INFORMATION........................   173

NOTICE TO CANADIAN SHAREHOLDERS AND OPTIONHOLDERS OF GLYKO.......   175

NOTICE TO UNITED STATES SHAREHOLDERS AND OPTIONHOLDERS OF GLYKO..   176

LIST OF ANNEXES:                                                       

ANNEX A--ACQUISITION AGREEMENT...................................   A-1

ANNEX A-1--AMENDING AGREEMENT.................................... A-1-1

ANNEX B--PLAN OF ARRANGEMENT.....................................   B-1

ANNEX C--ARRANGEMENT RESOLUTION..................................   C-1

ANNEX D--CONTINUANCE RESOLUTION..................................   D-1

ANNEX E--NOTICE OF APPLICATION AND INTERIM ORDER.................   E-1

ANNEX F--OPINION OF UBS WARBURG LLC..............................   F-1

ANNEX G--OPINION OF TD SECURITIES INC............................   G-1

ANNEX H--SECTION 190 OF THE CANADA BUSINESS CORPORATIONS ACT.....   H-1

ANNEX I--BIOMARIN CONSOLIDATED AUDITED FINANCIAL STATEMENTS......   I-1

ANNEX J--GLYKO AUDITED FINANCIAL STATEMENTS (IN CANADIAN GAAP)...   J-1

ANNEX K--GLYKO AUDITED FINANCIAL STATEMENTS (IN UNITED STATES          
  GAAP)..........................................................   K-1

ANNEX L--IBEX THERAPEUTIC ENZYMES DIVISION AUDITED FINANCIAL           
  STATEMENTS.....................................................   L-1

vi  

DEFM14A
14th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 14th
SUMMARY 

 The following is a summary of the information contained in this Joint Proxy
Circular. This summary may not contain all of the information that is important 
to you. You should carefully read this entire document and the other documents  
referred to herein for a more complete understanding of the arrangement, the    
continuance and related transactions involving BioMarin, BioMarin Acquisition   
(Nova Scotia) Company and Glyko. In particular, you should read the annexes     
attached to this Joint Proxy Circular, including the Acquisition Agreement, the 
Amending Agreement and the Plan of Arrangement, which are attached to this      
Joint Proxy Circular as Annexes A, A-1 and B, respectively.                     

In addition, the stockholders of BioMarin should carefully read the       
information concerning the proposal relating to the election of directors of    
BioMarin, as described under the section titled "The Annual Meeting of BioMarin 
Stockholders" in this Joint Proxy Circular.                                     

 Unless otherwise noted, all dollar amounts in this Joint Proxy Circular are
expressed in United States dollars.                                             

THE MEETINGS AND THE APPROVAL PROCESS--GENERALLY                                

Date, Time and Place                                                            

BioMarin.  The annual meeting of the stockholders of BioMarin will be held
on August 13, 2002, at Embassy Suites Hotel located at 101 McInnis Parkway, San 
Rafael, California 94903, at 10:00 a.m. (California time).                      

See "The Annual Meeting of BioMarin Stockholders--Date, Time and Place."  

Glyko.  The special meeting of the shareholders of Glyko will be held on  
August 15, 2002, at the offices of Blake, Cassels & Graydon LLP, 199 Bay        
Street, Suite 2300, Commerce Court West, Toronto, Ontario M5L 1A9 at 10:00 a.m. 
(Toronto time).                                                                 

See "The Special Meeting of Glyko Shareholders--Date, Time and Place."    

Purposes of the Meetings                                                        

BioMarin.  The purpose of the BioMarin annual meeting is to consider and  
vote upon (i) a proposal to elect six directors of BioMarin; (ii) a proposal to 
approve the transaction with Glyko, including, without limitation, the issuance 
of shares of BioMarin common stock in connection with the transaction; and      
(iii) such other business as properly may be brought before the BioMarin annual 
meeting or any adjournment or postponement thereof. BioMarin will not proceed   
with the transaction unless the transaction, including, without limitation, the 
issuance of shares of BioMarin common stock in connection with the transaction, 
is approved by its stockholders.                                                

See "The Annual Meeting of BioMarin Stockholders--Purpose of the Annual   
Meeting" and "The Annual Meeting of BioMarin Stockholders--Additional           
Information on Proposals for the Annual Meeting."                               

 Glyko.  The purpose of the Glyko meeting is (i) to consider, pursuant to an
interim order of the Superior Court of Justice (Ontario) dated July 2, 2002,    
and if deemed advisable, to pass, with or without variation, the Glyko          
arrangement resolution attached as Annex C to this Joint Proxy Circular to      
approve an arrangement under Section 192 of the Canada Business Corporations    
Act involving the acquisition by BioMarin of all the issued and outstanding     
common shares of Glyko; (ii) if the special resolution approving the            
above-mentioned arrangement is approved, to consider, and if deemed advisable,  
to pass, with or without variation, the Glyko continuance resolution attached   
as Annex D to this Joint Proxy Circular to approve the continuance of Glyko     
under the laws                                                                  

1   

DEFM14A
15th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 15th
of British Columbia; and (iii) to transact such further or other business as    
may properly come before the Glyko special meeting or any adjournment or        
postponement thereof. Glyko will not proceed with the transaction unless both   
the arrangement resolution and the continuance resolution are approved by       
shareholders.                                                                   

See "The Special Meeting of Glyko Shareholders--Purpose of the Special    
Meeting."                                                                       

Who Can Vote at the Meetings                                                    

BioMarin.  Only record holders of BioMarin common stock at the close of   
business on June 27, 2002 are entitled to notice of and to vote at the BioMarin 
annual meeting. On that date, there were 53,424,129 shares of BioMarin common   
stock outstanding. The holders of BioMarin common stock vote together as a      
single class. Each share will have one vote on each matter acted upon at the    
BioMarin annual meeting.                                                        

See "The Annual Meeting of BioMarin Stockholders--General" and "The Annual
Meeting of BioMarin Stockholders--Record Date for Annual Meeting."              

Glyko.  The Glyko shareholders whose names were entered on the register of
shareholders of Glyko at the close of business on July 4, 2002 will be entitled 
to receive notice of and to attend in person, or appoint a proxy nominee to     
attend, and vote at the Glyko special meeting. Shareholders are entitled to one 
vote for each Glyko common share held on that date.                             

See "The Special Meeting of Glyko Shareholders--General" and "The Special 
Meeting of Glyko Shareholders--Record Date for Special Meeting."                

What Vote is Required                                                           

BioMarin.  The presence, in person or by proxy, at the BioMarin annual    
meeting of the holders of a majority of the outstanding shares of BioMarin      
common stock is necessary for a quorum. The affirmative vote by holders of a    
majority of the outstanding shares of BioMarin common stock, present in person  
or by proxy at the annual meeting, is required to approve the matters properly  
brought before the annual meeting, except for the election of the directors.    
The directors will be elected by a plurality of the votes of the shares present 
in person or by proxy and entitled to vote.                                     

See "The Annual Meeting of BioMarin Stockholders--Vote Required."         

 Glyko.  The presence, in person or by proxy, at the Glyko meeting of two or
more shareholders holding common shares representing at least 33% of the        
outstanding Glyko common shares is necessary for a quorum. The Glyko            
arrangement resolution and the Glyko continuance resolution must be approved by 
not less than two-thirds of the votes cast by the holders of Glyko common       
shares, voting in person or by proxy, at the Glyko special meeting.             
Shareholders representing approximately 27.3% of the Glyko common shares have   
agreed with BioMarin, subject to certain conditions, to vote their shares in    
favor of the Glyko arrangement resolution and Glyko continuance resolution and  
otherwise support the transaction.                                              

See "The Special Meeting of Glyko Shareholders--Vote Required."           

Revocability of Proxies                                                         

BioMarin.  A stockholder who has given a proxy may revoke it at any time  
before it is exercised at the BioMarin annual meeting, by (1) delivering to the 
secretary of BioMarin (by any means, including facsimile) a written notice      
stating that the proxy is revoked, (2) signing and so delivering a proxy        
bearing a later date or                                                         

2   

DEFM14A
16th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 16th
(3) attending the BioMarin annual meeting and voting in person (although        
attendance at the BioMarin annual meeting will not, by itself, revoke a proxy). 

See "The Annual Meeting of BioMarin Stockholders--Voting of Proxies at    
Annual Meeting and Revocability of Proxies."                                    

Glyko.  The form of proxy accompanying this Joint Proxy Circular confers  
discretionary authority upon the proxy nominee with respect to any amendments   
or variations to the matters identified in the notice of special meeting of     
shareholders of Glyko and any other matter which may properly come before the   
Glyko special meeting or any adjournment thereof.                               

 If a proxy given to Glyko management is signed and returned, the securities
represented by the proxy will be voted for or against the Glyko arrangement     
resolution and the Glyko continuance resolution, in accordance with the         
instructions marked on the proxy. If no instructions are marked, the securities 
represented by such a proxy will be voted FOR the Glyko arrangement resolution  
and FOR the Glyko continuance resolution and in accordance with Glyko           
management's recommendation with respect to amendments or variations of the     
matters set out in the Glyko notice of special meeting or any other matters     
which may properly come before the Glyko special meeting.                       

  See "The Special Meeting of Glyko Shareholders--Voting of Proxies at Special
Meeting and Revocation of Proxies."                                             

THE TRANSACTION--GENERALLY                                                      

Parties to the Transaction                                                      

BioMarin Pharmaceutical Inc.  
371 Bel Marin Keys Blvd., Suite 210 
Novato, California 94949  
(415) 884-6700  

BioMarin, a Delaware corporation, is engaged in the business of developing
enzyme therapies to treat serious, life-threatening diseases and conditions.    

See "Business of BioMarin--Overview."                                     

BioMarin Acquisition (Nova Scotia) Company  
371 Bel Marin Keys Blvd., Suite 210 
Novato, California 94949  
(415) 884-6700  

BioMarin Acquisition (Nova Scotia) Company ("BioMarin Nova Scotia") was   
incorporated under the laws of the Province of Nova Scotia on February 6, 2002, 
as an unlimited liability company for the sole purpose of effecting the         
transaction. BioMarin Nova Scotia has not conducted any business since its      
formation and, after the transaction is completed, will continue to exist as a  
wholly-owned subsidiary of BioMarin Acquisition (Del.) Inc., a Delaware         
corporation, which is a wholly-owned subsidiary of BioMarin.                    

Glyko Biomedical Ltd. 
199 Bay Street  
Toronto, Ontario M5L 1A9  
(416) 863-2400  

3   

DEFM14A
17th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 17th
Glyko was incorporated under the laws of Canada on June 26, 1992. On      
December 21, 1992, simultaneously with the initial public offering of Glyko's   
common shares and listing on the Toronto Stock Exchange, Glyko acquired 100% of 
the outstanding shares of Glyko, Inc., a company incorporated under the laws of 
Delaware. At the time of acquisition, Glyko, Inc. was involved with original    
scientific research aimed at developing novel analytic and research             
instrumentation for carbohydrate research and for human medical diagnosis.      
Glyko was incorporated for the sole purpose of acquiring Glyko, Inc.            

On October 25, 1996, Glyko formed BioMarin to develop its pharmaceutical  
products. Beginning in October 1997, BioMarin commenced raising capital from    
third parties and engaging in other transactions which resulted in BioMarin     
issuing common stock to entities other than Glyko. As a result, Glyko's         
percentage ownership interest in BioMarin decreased over time. On October 7,    
1998, Glyko sold Glyko, Inc., which produces certain carbohydrate analytical    
products, to BioMarin. As a result of the sale of Glyko, Inc., Glyko has no     
operating activities or operational employees. Glyko's only significant asset,  
other than cash and cash equivalents, is its investment in BioMarin. Glyko owns 
approximately 21.3% of the outstanding shares of BioMarin common stock based on 
the number of issued and outstanding shares of BioMarin common stock as of June 
27, 2002.                                                                       

See "Business of Glyko--Overview."                                        

Joint Reasons for the Transaction                                               

The boards of directors of BioMarin and Glyko approved the Acquisition    
Agreement, and the transactions contemplated by the Acquisition Agreement,      
because they determined that the stockholders of their respective companies     
will benefit from the transaction. Among other benefits, the boards of          
directors believe that:                                                         

.   the stockholders of BioMarin, including former Glyko shareholders, will 
benefit from BioMarin's simplified share ownership structure;       

.   the stockholders of BioMarin, including the former Glyko shareholders,  
   will benefit from the increased number of holders of shares of BioMarin
 common stock, as the liquidity of the BioMarin common stock should be
enhanced; and                                                       

.   the shareholders of Glyko will benefit from having direct ownership     
  interests in BioMarin and from the increased liquidity associated with
holding shares of BioMarin common stock.                            

See "The Transaction--Joint Reasons for the Transaction."                 

Recommendation of BioMarin's Board of Directors for the Transaction             

  The disinterested members of BioMarin's board of directors, which constitute
a majority of the BioMarin board of directors, believe that the terms of the    
transaction are fair to the stockholders of BioMarin and in the best interests  
of BioMarin and have unanimously approved the transaction including, without    
limitation, the issuance of shares of BioMarin common stock in connection with  
the transaction, and recommend that the stockholders of BioMarin vote FOR the   
transaction including, without limitation, the issuance of shares of BioMarin   
common stock in connection with the transaction.                                

See "The Transaction--Joint Reasons for the Transaction" and "The         
Transaction--Recommendation of BioMarin's Board of Directors."                  

4   

DEFM14A
18th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 18th
Opinion of BioMarin's Financial Advisor                                         

  The BioMarin board of directors received a written opinion dated February 6,
2002 from UBS Warburg LLC, BioMarin's financial advisor, as to the fairness,    
from a financial point of view, to BioMarin of the exchange ratio set forth in  
the Acquisition Agreement. The full text of UBS Warburg's written opinion,      
dated February 6, 2002, is attached to this Joint Proxy Circular as Annex F.    
BioMarin stockholders are encouraged to carefully read this opinion in its      
entirety for a description of the assumptions made, procedures followed,        
matters considered and limitations on the review undertaken. UBS Warburg's      
opinion is addressed to the BioMarin board of directors and does not constitute 
a recommendation to any stockholder with respect to any matter relating to the  
proposed transaction.                                                           

See "The Transaction--Opinion of BioMarin's Financial Advisor."           

Recommendation of Glyko's Board of Directors                                    

 The Glyko board of directors believes that the terms of the arrangement are
fair to the shareholders of Glyko and in the best interests of Glyko.           
Accordingly, the Glyko board of directors has unanimously approved the          
Acquisition Agreement and recommends that the shareholders of Glyko vote FOR    
the Glyko arrangement resolution and FOR the Glyko continuance resolution.      

See "The Transaction--Joint Reasons for the Transaction" and "The         
Transaction--Recommendation of Glyko's Board of Directors."                     

Opinion of Glyko's Financial Advisor                                            

In deciding to approve the Acquisition Agreement and the transactions     
contemplated by the Acquisition Agreement, Glyko's board of directors           
considered an opinion from its financial advisor, TD Securities Inc. On         
February 6, 2002, TD Securities delivered its opinion to the board of directors 
of Glyko that, as of that date, the consideration to be received by Glyko       
shareholders under the Acquisition Agreement is fair, from a financial point of 
view.                                                                           

  The full text of the TD Securities opinion, which sets forth the assumptions
made, matters considered and limits on review undertaken, is attached to this   
Joint Proxy Circular as Annex G. Glyko shareholders are encouraged to carefully 
read the opinion in its entirety. The opinion of TD Securities is addressed to  
the board of directors of Glyko and relates only to the fairness, from a        
financial point of view, of the consideration to be received by the holders of  
Glyko common shares. The opinion does not address any other aspects of the      
proposed arrangement or the continuance and does not constitute an opinion or   
recommendation to any shareholder of Glyko as to how such shareholder should    
vote with respect to the Glyko arrangement resolution or the Glyko continuance  
resolution.                                                                     

See "The Transaction--Opinion of Glyko's Financial Advisor."              

Interests of Certain Persons in the Transaction                                 

 In considering how to vote your securities with respect to the transaction,
you should be aware that certain members of the BioMarin board of directors and 
certain members of management and the board of directors of Glyko have certain  
interests in the transaction that may present them with actual or potential     
conflicts of interest in connection with the transaction. The BioMarin board of 
directors and the Glyko board of directors were aware of these interests and    
considered them along with the other matters summarized above. These interests  
include:                                                                        

.   the receipt by directors of Glyko, two directors and two executive      
   officers of BioMarin (in their capacities as shareholders of Glyko), of
shares of BioMarin common stock in exchange for Glyko               

5   

DEFM14A
19th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 19th
common shares in the transaction. These directors and officers will 
   receive the same per share consideration as other Glyko shareholders in
the transaction;                                                    

.   the receipt by directors and officers of Glyko (the only holders of     
   options for Glyko common shares) of options to purchase BioMarin common
stock in exchange for options to purchase Glyko common shares; and  

.   a promise by BioMarin to provide directors' and officers' liability     
insurance for a specified period to Glyko's board of directors and  
management.                                                         

Furthermore, the Acquisition Agreement provides executive officers and    
directors of Glyko with continuing indemnification rights upon terms and        
conditions consistent with those in effect on the date of the Acquisition       
Agreement.                                                                      

See "The Transaction--Interests of Certain Persons in the Transaction."   

Share Ownership of Directors and Executive Officers and Certain Related Persons 
of BioMarin                                                                     

As of the close of business on June 27, 2002, the directors and executive 
officers of BioMarin (and their respective affiliates, not including Glyko)     
collectively beneficially owned approximately 3.0% of the shares of BioMarin    
common stock entitled to vote at the BioMarin annual meeting. These directors   
include Messrs. Erich Sager and Gwynn Williams, who collectively own or control 
approximately 8.3% of the Glyko common shares. Furthermore, Glyko owns          
approximately 21.3% of the issued and outstanding shares of BioMarin common     
stock based on the number of issued and outstanding shares of BioMarin common   
stock as of June 27, 2002. Accordingly, the directors and executive officers of 
BioMarin (and their respective affiliates) together with Glyko collectively     
beneficially own approximately 24.3% of the shares of BioMarin common stock     
entitled to vote at the BioMarin annual meeting, which represents a substantial 
percentage of the vote required to approve the transaction because the          
affirmative vote by holders of a majority of the outstanding BioMarin common    
stock, present in person or by proxy at the annual meeting of BioMarin's        
stockholders, is required to approve the transaction including, without         
limitation, the issuance of shares of BioMarin common stock in connection with  
the transaction.                                                                

See "The Transaction--Share Ownership of Directors and Executive Officers 
and Certain Related Persons of BioMarin."                                       

Share Ownership of Directors and Executive Officers of Glyko                    

As of the close of business on July 4, 2002, directors and executive      
officers of Glyko (and their respective associates) collectively owned or       
exercised direction or control over less than 1% of the Glyko common shares     
entitled to vote at the Glyko special meeting, exclusive of options to acquire  
Glyko common shares also held by these directors and executive officers. Other  
than Messrs. Erich Sager, Gwynn Williams, Christopher Starr and Emil Kakkis,    
BioMarin and its affiliates do not currently own any Glyko common shares. The   
vote required for approval of the Glyko arrangement resolution and the Glyko    
continuance resolution at the Glyko special meeting is not less than two-thirds 
of the votes cast at the special meeting by holders of Glyko common shares      
present in person or by proxy at the special meeting. Shareholders representing 
approximately 27.3% of the Glyko common shares (including all of the directors  
of Glyko who are shareholders) have agreed with BioMarin, subject to certain    
conditions, to vote their shares in favor of the Glyko arrangement resolution   
and the Glyko continuance resolution.                                           

  See "The Transaction--Share Ownership of Directors and Executive Officers of
Glyko."                                                                         

6   

DEFM14A
20th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 20th
Structure and Effects of the Transaction                                        

The Acquisition Agreement among BioMarin, BioMarin Nova Scotia and Glyko  
dated as of February 6, 2002, as amended by the Amending Agreement dated as of  
May 16, 2002 (attached as Annex A-1) and the Plan of Arrangement are attached   
to this Joint Proxy Circular as Annex A and Annex B, respectively. Please read  
the Acquisition Agreement, the Amending Agreement, the Plan of Arrangement and  
the other transaction agreements as they are the principal legal documents that 
govern the transaction.                                                         

The Acquisition Agreement and Plan of Arrangement provide for the         
combination of BioMarin and Glyko in a transaction under which each holder of   
Glyko common shares will receive for each Glyko common share held, 0.3309 of a  
share of BioMarin common stock. In no event will the aggregate number of shares 
of BioMarin common stock issued to Glyko shareholders exceed 11,367,617. Glyko  
shareholders who properly exercise dissent rights will not be entitled to       
receive shares of BioMarin common stock but will be entitled to receive payment 
in cash from Glyko representing the fair value of their Glyko common shares. It 
is a condition to closing of the transaction that holders of no more than one   
percent in the aggregate of the issued and outstanding Glyko common shares      
shall have exercised dissent rights in respect of the arrangement and the       
continuance.                                                                    

  The mechanics of the transaction will involve BioMarin Nova Scotia acquiring
all of the outstanding common shares of Glyko (other than those of dissenting   
Glyko shareholders who ultimately receive the fair value of their Glyko common  
shares) in exchange for shares of BioMarin common stock.                        

Each Glyko option not exercised prior to the implementation time of the   
arrangement will be exchanged for an option to purchase a number of shares of   
BioMarin common stock equal to 0.3309 multiplied by the number of Glyko common  
shares subject to such Glyko option, with the total number of shares of         
BioMarin common stock subject to the replacement option rounded down to the     
nearest whole number. The exercise price per share of the replacement options   
to acquire BioMarin common stock shall be equal to the U.S. dollar equivalent   
of the exercise price per Glyko common share of the Glyko option immediately    
prior to the consummation of the arrangement divided by 0.3309, rounded up to   
the nearest whole cent. Each replacement option will be granted in accordance   
with BioMarin's 1997 Stock Plan.                                                

In connection with the transaction, "implementation time" means 12:01 a.m.
(Pacific time) on the date that is the earlier of (i) the date that Glyko is    
continued under the laws of British Columbia; (ii) the date upon which Glyko's  
board of directors resolves to implement the arrangement, which in no event may 
be prior to the effective date; or (iii) the date that is 10 days following the 
effective date. The "effective date" is the date of the certificate of          
arrangement to be issued pursuant to the Canada Business Corporations Act       
giving effect to the arrangement.                                               

Immediately following the completion of the transaction and as a result   
thereof, former holders of Glyko common shares will hold an aggregate of        
approximately 11,367,617 shares of BioMarin common stock which, based on the    
number of issued and outstanding shares of BioMarin common stock as of June 27, 
2002 and assuming completion of the preferred stock exchange described below,   
will represent approximately 21.3% of the outstanding shares of BioMarin common 
stock.                                                                          

  See "The Transaction," "Transaction Mechanics" and "Pro Forma Capitalization
of BioMarin."                                                                   

The Companies after the Transaction                                             

Following completion of the transaction, BioMarin intends to exchange the 
11,367,617 shares of BioMarin common stock owned by Glyko for Series A          
Preferred Stock of BioMarin, cancel such 11,367,617 shares of common stock and  
have Glyko remain as a non-operating, indirect subsidiary of BioMarin.          

   See "The Transaction--Continuance" and "The Companies after the Transaction."

7   

DEFM14A
21st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 21st
Completion and Effectiveness of the Transaction                                 

  The transaction will be completed as soon as practicable after the requisite
shareholder, regulatory and court approvals have been obtained and are final    
and all other conditions to the transaction have been satisfied or waived.      
BioMarin and Glyko currently plan to complete the transaction during the third  
calendar quarter of 2002. The arrangement is subject to court approval and      
other conditions, some of which are beyond the control of BioMarin and Glyko,   
and therefore the exact timing of completion of the transaction cannot be       
predicted with certainty. Either party may terminate the Acquisition Agreement  
if the transaction is not completed by August 30, 2002.                         

See "The Transaction--Court Approval of the Arrangement and Completion of 
the Transaction."                                                               

The Acquisition Agreement--Certain Covenants, Conditions to Completion of the   
Arrangement and Other Matters                                                   

No Solicitation                                                             

  Glyko has agreed that, while the transaction is pending, it will not solicit
or engage in discussions or negotiations with any third parties with respect to 
an Acquisition Proposal. An Acquisition Proposal means any offer, proposal or   
inquiry (other than an offer or proposal by BioMarin) contemplating or          
otherwise relating to any Acquisition Transaction. An Acquisition Transaction   
includes, among other things, a transaction relating to any merger,             
consolidation, amalgamation, business combination or sale of more than 20% of   
the assets or outstanding securities of any class of voting securities of       
Glyko, provided that Glyko may enter into such discussions and enter into an    
agreement with a third party with respect to such a transaction if Glyko's      
board of directors determines, subject to the satisfaction of certain           
conditions, that failure to take such action would be inconsistent with its     
fiduciary obligations under applicable law.                                     

See "The Acquisition Agreement--Material Covenants."                      

Conditions to Completion of the Arrangement                                 

 Completion of the arrangement is subject to the satisfaction of a number of
conditions, including:                                                          

.   the approval of the Glyko arrangement resolution and the Glyko          
   continuance resolution each by at least two-thirds of the votes cast by
the holders of Glyko common shares who are represented at the Glyko 
  special meeting and in accordance with any other conditions imposed by
  the interim order attached as Annex E to this Joint Proxy Circular and
which are satisfactory to Glyko;                                    

.   the approval of the arrangement, including the issuance of shares of    
BioMarin common stock, by at least a majority of the votes cast by  
   holders of BioMarin common stock voting at the BioMarin annual meeting;

.   the issuance of a final order of the Superior Court of Justice (Ontario)
acceptable to BioMarin and Glyko;                                   

 .   the exemption from registration under the United States Securities Act of
1933 of the shares of BioMarin common stock to be issued upon the   
consummation of the arrangement;                                    

.   the absence of any legal proceeding in which a governmental body is     
seeking to prevent the consummation of the arrangement;             

.   the accuracy in all material respects of the representations and        
   warranties of BioMarin, BioMarin Nova Scotia and Glyko contained in the
Acquisition Agreement;                                              

8   

DEFM14A
22nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 22nd
.   there not having occurred a material adverse change with respect to     
either Glyko or BioMarin since February 6, 2002; and                

.   holders of no more than one percent in the aggregate of the issued and  
    outstanding Glyko common shares having exercised and not withdrawn their
dissent rights.                                                     

  Some of the conditions to completion of the arrangement may be waived by the
party entitled to assert the benefit of the condition. Neither BioMarin nor     
Glyko intends to solicit shareholder approval of the transaction based on a     
waived condition, unless its board of directors determines in good faith that   
the waiver of such condition is sufficiently material as to warrant seeking     
further shareholder approval.                                                   

  See "The Acquisition Agreement--Conditions to Completion of the Arrangement"
and "The Transaction--Qualification and Resale of Shares of BioMarin Common     
Stock."                                                                         

Termination of the Acquisition Agreement                                    

  Glyko and BioMarin may mutually agree to terminate the Acquisition Agreement
without completing the transaction. In addition, either Glyko or BioMarin may   
terminate the Acquisition Agreement under any of the following circumstances:   

.   if the arrangement has not been consummated by August 30, 2002;         

.   if a governmental body shall have issued an order, decree or ruling     
having the effect of prohibiting the arrangement;                   

.   if the requisite approval of the holders of Glyko common shares is not  
obtained;                                                           

.   if the requisite approval of the holders of BioMarin common stock is not
obtained; or                                                        

 .   if the conditions to completion of the arrangement would not be satisfied
 because of a material breach by the other party (which in the case of
  BioMarin includes BioMarin Nova Scotia) of any of its representations,
  warranties, covenants or other agreements contained in the Acquisition
Agreement or if any of the other party's material representations or
    warranties becomes untrue (although in any such case the breaching party
would have 30 days to cure any such breach).                        

 BioMarin may also terminate the Acquisition Agreement if Glyko breaches the
provisions of the Acquisition Agreement that prohibit Glyko from, among other   
things, soliciting Acquisition Proposals from third parties.                    

See "The Acquisition Agreement--Termination of the Acquisition Agreement."

Payment of Termination Fee                                                  

 Under certain circumstances, Glyko or BioMarin is required to pay the other
a termination fee of $1.0 million if the Acquisition Agreement is terminated.   

See "The Acquisition Agreement--Payment of Termination Fee."              

Other Agreements                                                                

As a condition to closing the transaction, Glyko and BioMarin will enter  
into agreements with certain affiliates of Glyko, pursuant to which such        
affiliates agree not to sell, pledge or otherwise dispose of any shares of      
BioMarin common stock unless: (i) such transaction is permitted under Rule 145  
under the United States                                                         

9   

DEFM14A
23rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 23rd
Securities Act of 1933; (ii) such transaction is made pursuant to an effective  
registration statement under the United States Securities Act of 1933, or (iii) 
such transaction is made pursuant to an exemption from registration under the   
United States Securities Act of 1933.                                           

BioMarin has entered into agreements with certain shareholders of Glyko   
(including all of the directors who are shareholders), representing, in the     
aggregate, approximately 27.3% of the outstanding Glyko common shares, pursuant 
to which each such shareholder has agreed, among other things: (i) to vote the  
Glyko common shares held by such shareholder in favor of the arrangement and    
the transactions contemplated thereby; and (ii) to vote the Glyko common shares 
held by such shareholder against (1) any Acquisition Proposal (other than a     
Superior Offer), (2) any reorganization, recapitalization, dissolution,         
liquidation or winding up of Glyko, and (3) any amendment of the articles of    
incorporation or bylaws of Glyko which would prevent, impede, interfere with or 
delay the arrangement.                                                          

Under the terms of the Acquisition Agreement, a Superior Offer is an      
unsolicited, bona fide written offer made by a third party (other than BioMarin 
or its affiliates) which, if consummated, would result in such third party      
acquiring, directly or indirectly, securities representing more than 50% of the 
voting power of the shares of Glyko or the resulting entity of such transaction 
or all or substantially all of the assets of Glyko, in each case on terms which 
the board of directors of Glyko reasonably determines (following receipt of     
advice from its financial advisors of nationally recognized reputation and      
outside counsel) to be more favorable to Glyko's shareholders than the terms of 
the arrangement.                                                                

See "The Transaction--Other Agreements."                                  

Tax Considerations for Glyko Securityholders                                    

Glyko securityholders should read carefully the information under "Tax    
Considerations for Glyko Securityholders," which qualifies the information set  
forth below, and should consult their own tax advisors with respect to their    
particular circumstances. No advance income tax rulings have been sought or     
obtained with respect to any of the transactions described herein.              

Canadian Federal Income Tax Considerations                                  

  Canadian resident Glyko shareholders who hold Glyko common shares as capital
property and who receive shares of BioMarin common stock pursuant to the        
arrangement will dispose of their Glyko common shares and will generally be     
considered to have realized a capital gain (or capital loss) to the extent that 
the proceeds of disposition of their Glyko common shares exceed (or are less    
than) the aggregate of the adjusted cost base of such shares and any reasonable 
costs of disposition. For this purpose, the proceeds of disposition will be     
equal to the fair market value of the shares of BioMarin common stock received, 
determined at the implementation time of the arrangement, plus the amount of    
any cash received in lieu of a fractional share. Shares of BioMarin common      
stock received by Glyko shareholders that are Canadian deferred income plans    
will be "qualified investments" (provided they are listed on a prescribed stock 
exchange) but will be "foreign property" for Canadian federal income tax        
purposes. Glyko shareholders who are not at any time Canadian residents will    
not generally be subject to Canadian federal income tax on the exchange of      
Glyko common shares for shares of BioMarin common stock pursuant to the         
arrangement.                                                                    

See "Tax Considerations for Glyko Securityholders--Canadian Tax           
Considerations for Glyko Shareholders."                                         

United States Federal Income Tax Considerations                             

The arrangement is intended to qualify as a "reorganization" within the   
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. In  
that event and subject to the "passive foreign investment                       

10  

DEFM14A
24th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 24th
company" or PFIC rules, a Glyko shareholder who is a United States person and   
who holds such Glyko common shares as capital assets generally should not       
recognize any gain or loss upon the exchange of Glyko common shares for         
BioMarin common stock. Subject to the PFIC rules, a Glyko shareholder who is a  
United States person, who dissents from the arrangement and is ultimately       
determined to receive fair value for its Glyko common stock will generally      
recognize a capital gain or loss equal to the difference between the U.S.       
dollar value of any payment (other than any amount treated as interest)         
received from Glyko and such dissenting shareholder's aggregate adjusted tax    
basis in the Glyko common shares in respect of which such shareholder           
dissented. Any payment received by a dissenting shareholder that is treated as  
interest will be taxed as ordinary income.                                      

The application of the PFIC rules could change these consequences. For its
fiscal year beginning January 1, 2002, Glyko likely will be a PFIC. In          
addition, although the matter is not free from doubt, for its fiscal year       
ending December 31, 2001, Glyko may have been a PFIC. Glyko makes no            
representation whether it was or was not a PFIC for any other fiscal year.      
Glyko common shares will be treated as stock of a PFIC held by a U.S. person    
if, at any time during the holding period of such stock, Glyko is a PFIC. The   
PFIC rules are complex and often disadvantageous to United States persons who   
own shares of a PFIC.                                                           

See "Tax Considerations for Glyko Securityholders--United States Federal  
Income Tax Considerations for Glyko Shareholders."                              

Accounting Treatment of the Transaction                                         

  BioMarin will record the transaction based upon the fair value of the common
stock issued by BioMarin as of the date of closing. Following the transaction,  
BioMarin expects to exchange its shares of common stock owned by Glyko for      
shares of BioMarin preferred stock and to cancel such shares of common stock.   
Because Glyko's investment in BioMarin will be held within a consolidated group 
and will not appear in the consolidated financial statements, no incremental    
consolidated assets or stockholders' equity will arise as a result of the       
transaction.                                                                    

See "The Transaction--Accounting Treatment."                              

Contingent Capital Gains Tax Liability to BioMarin                              

  Upon completion of the transaction, BioMarin will hold indirectly all of the
shares of BioMarin held by Glyko. Upon a taxable disposition of such shares,    
Glyko (and indirectly BioMarin) would recognize a capital gain which would be   
subject to tax under Canadian federal and provincial income tax laws. The       
capital gain for Canadian tax purposes would be equal to the difference between 
the fair market value of the BioMarin shares held by Glyko as of the date of    
disposition and the aggregate of Glyko's adjusted cost base of such shares and  
any reasonable costs of disposition. Under current Canadian federal and         
provincial income tax laws and tax rates currently in effect for the 2002       
calendar year, Glyko (and indirectly BioMarin) would be obligated to pay        
Canadian federal and provincial income tax at a combined rate of approximately  
19% of the capital gain.                                                        

BioMarin may be subject to United States federal income tax upon the      
liquidation or deemed liquidation of the shares of BioMarin held by Glyko.      
However the timing and amount of the gain subject to tax would vary based on    
the specific facts surrounding the liquidation or deemed liquidation event. In  
addition, the events which would trigger the recognition of gain by Glyko are   
completely within the discretion and control of Glyko and indirectly BioMarin,  
and neither Glyko nor BioMarin has any intention of implementing any of these   
events.                                                                         

See "The Transaction--Contingent Capital Gain Tax Liability to BioMarin." 

11  

DEFM14A
25th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 25th
Court and Regulatory Approvals Required to Complete the Transaction             

Court Approval                                                              

An arrangement under the Canada Business Corporations Act requires court  
approval. Prior to the mailing of this Joint Proxy Circular in connection with  
the Glyko special meeting, Glyko obtained an interim order from the Superior    
Court of Justice (Ontario) providing for the calling and holding of the Glyko   
special meeting and other procedural matters. Subject to the approval of the    
Glyko arrangement resolution and the Glyko continuance resolution at the Glyko  
special meeting and the approval of the transaction, including the issuance of  
shares of BioMarin common stock at the BioMarin annual meeting, the hearing to  
obtain a final order of the Court is scheduled to take place on or about August 
16, 2002 at 10:00 a.m. (Toronto time) at the Toronto courthouse located at 393  
University Avenue, Toronto, Ontario.                                            

See "The Transaction--Court Approval of the Arrangement and Completion of 
the Transaction."                                                               

Regulatory Matters                                                          

The arrangement and the transactions contemplated by the Acquisition      
Agreement are subject to the following regulatory approvals and filings: (i)    
approval of the Registrar under the Company Act (British Columbia) to the       
continuance of Glyko under the laws of British Columbia; (ii) approval of the   
Director under the Canada Business Corporations Act to the continuance of Glyko 
under the laws of British Columbia; and (iii) the filing of an application for  
the listing of additional shares with Nasdaq regarding the shares of BioMarin   
common stock issuable in the transaction.                                       

See "The Transaction--Regulatory Matters."                                

Restrictions on the Ability of Glyko Shareholders to Sell BioMarin Common Stock 

All shares of BioMarin common stock received by Glyko shareholders in     
connection with the transaction will be freely transferable under U.S.          
securities laws unless a Glyko shareholder is an affiliate (within the meaning  
of that term under the United States Securities Act of 1933) of Glyko prior to, 
or an affiliate of BioMarin following, the completion of the transaction.       
Shares of BioMarin common stock held by such affiliates may only be sold in     
compliance with Rule 145 under the United States Securities Act of 1933.        

  See "The Transaction--Exemption from Registration Requirements of Securities
Laws and Limitations on Resale of BioMarin Common Stock."                       

Transaction Costs                                                               

In connection with the transaction, BioMarin and Glyko expect to incur    
aggregate costs, including, without limitation, financial advisors' fees, legal 
and accounting fees, soliciting fees and printing and mailing costs of          
approximately $3.7 million and filing fees of approximately $19,000.            

Stock Exchange Listings                                                         

A condition to the closing of the arrangement is the filing of an         
application for the listing of additional shares with Nasdaq regarding the      
shares of BioMarin common stock to be issued pursuant to the transaction to     
Glyko shareholders. The shares of BioMarin common stock to be issued pursuant   
to the transaction will also be listed on the Swiss SWX New Market as promptly  
as possible following completion of the transaction.                            

See "The Transaction--Stock Exchange Listings."                           

12  

DEFM14A
26th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 26th
Dissenters' Appraisal Rights                                                    

BioMarin                                                                    

Under Delaware law, stockholders of BioMarin will not have dissenters'    
appraisal rights in connection with the transaction.                            

Glyko                                                                       

Registered Glyko shareholders who properly exercise their dissent rights  
pursuant to the interim order issued by the Superior Court of Justice (Ontario) 
and under the Canada Business Corporations Act will be entitled to be paid the  
fair value of their Glyko common shares. The dissent procedures require that a  
registered Glyko shareholder who wishes to dissent must provide Glyko a dissent 
notice at or prior to the Glyko special meeting of shareholders. The obligation 
of BioMarin to complete the arrangement is subject to the condition that        
holders of no more than one percent of the issued and outstanding Glyko common  
shares in the aggregate shall have exercised and not withdrawn dissent rights   
in respect of the arrangement or the continuance.                               

See "Dissenting Shareholder Rights."                                      

13  

DEFM14A
27th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 27th
Summary Consolidated Financial Information of BioMarin                          

Set forth below is a summary of certain financial information with respect
to BioMarin and its subsidiaries as at the dates and for the periods indicated. 
The summary financial data of BioMarin has been derived from BioMarin's         
consolidated financial statements included in Annex I to this Joint Proxy       
Circular. BioMarin's financial information has been prepared using United       
States Generally Accepted Accounting Principles (GAAP), which differs in        
certain respects from Canadian GAAP. All dollar amounts are expressed in U.S.   
dollars.                                                                        

                                                        [Enlarge/Download Table]

                                                                                 Three Month Period        
                                                      Year ended December 31,     ended March 31,          
                                                   ----------------------------  ------------------------- 
                                                     1999      2000      2001      2001         2002       
                                                   --------  --------  --------    -------      --------   
                                                     (in thousands, except for   (in thousands, except for 
                                                          per share data)        per share data, unaudited)
                                                                                                           
Consolidated statements of operations data(1):                                                             
Revenues.......................................... $  5,300  $  9,714  $ 11,699  $ 2,690      $  3,792     
Operating costs and expenses:                                                                              
   Research and development.......................   26,341    34,459    45,283    9,657        13,218     
   General and administrative.....................    4,757     6,507     6,718    1,474         3,926     
   In-process research and development............       --        --    11,647       --        11,223     
   Facility closure...............................       --     4,423        --       --            --     
                                                   --------  --------  --------    -------      --------   
       Total operating costs and expenses.........   31,098    45,389    63,648   11,131        28,367     
                                                   --------  --------  --------    -------      --------   
Loss from operations..............................  (25,798)  (35,675)  (51,949)  (8,441)      (24,575)    
Interest income...................................    1,832     2,979     1,871      468           380     
Interest expense..................................     (732)       (7)      (17)      (2)          (91)    
Equity in loss of joint venture...................   (1,673)   (2,912)   (7,333)  (1,108)       (2,298)    
                                                   --------  --------  --------    -------      --------   
Net loss from continuing operations...............  (26,371)  (35,615)  (57,428)  (9,083)      (26,584)    
Income (loss) from discontinued operations........   (1,701)   (1,749)   (2,266)    (617)          122     
Loss from disposal of discontinued operations.....       --        --    (7,912)      --          (141)    
                                                   --------  --------  --------    -------      --------   
Net loss.......................................... $(28,072) $(37,364) $(67,606) $(9,700)     $(26,603)    
                                                   ========  ========  ========    =======      ========   
Net loss per share, basis and diluted:                                                                     
   Loss from continuing operations................ $  (0.88) $  (0.99) $  (1.40) $ (0.24)     $  (0.51)    
                                                   ========  ========  ========    =======      ========   
   Income (loss) from discontinued operations..... $  (0.06) $  (0.05) $  (0.06) $ (0.02)     $     --     
                                                   ========  ========  ========    =======      ========   
   Loss on disposal of discontinued operations.... $     --  $     --  $  (0.19) $    --      $     --     
                                                   ========  ========  ========    =======      ========   
   Net loss....................................... $  (0.94) $  (1.04) $  (1.65) $ (0.26)     $  (0.51)    
                                                   ========  ========  ========    =======      ========   
Weighted average common shares outstanding........   29,944    35,859    41,083   37,052        52,535     
                                                   ========  ========  ========    =======      ========   

                                                        [Enlarge/Download Table]

                                                                    December 31,                 
                                                                  ----------------   March 31,   
                                                                   2000     2001        2002     
                                                                  ------- -------- --------------
                                                                   (in thousands)  (in thousands,
                                                                                     unaudited)  
                                                                                                 
Consolidated balance sheet data:                                                                 
Cash, cash equivalents and short-term investments................ $40,201 $131,097    $114,798   
Total current assets.............................................  44,541  136,783     123,426   
Total assets.....................................................  76,933  171,811     157,306   
Long-term liabilities............................................      56    3,961       3,503   
Total stockholders' equity.......................................  69,994  159,548     144,368   

--------                                                                        
(1) See notes to BioMarin's consolidated financial statements for a description 
  of the number of shares used in the computation of the net loss per common
share.                                                                  

14  

DEFM14A
28th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 28th
Summary Financial Information of Glyko                                          

Set forth below is a summary of certain financial information with respect
to Glyko as of the dates and for the periods indicated. The summary financial   
data of Glyko has been derived from Glyko's financial statements included in    
Annex J to this Joint Proxy Circular. In order to comply with Canadian          
securities regulatory requirements, Glyko's financial information has been      
prepared using Canadian GAAP, which differs in certain respects from United     
States GAAP. All dollar amounts are expressed in U.S. dollars.                  

                                                        [Enlarge/Download Table]

                                                                                              Three Month       
                                                                                             Period ended       
                                                    Year ended December 31,                    March 31,        
                                                 ----------------------------------------  -------------------- 
                                                   1999          2000          2001          2001       2002    
                                                   --------      --------      --------     -------    -------  
                                                                                           (in thousands, except
                                                                                           for per share data,  
                                                 (in thousands, except for per share data)    unaudited)        
                                                                                                                
Statements of operations data(1):                                                                               
Revenues........................................ $     --      $     --      $     --      $    --    $    --   
Expenses:                                                                                                       
   General and administrative...................      199           388           462           70        295   
                                                   --------      --------      --------     -------    -------  
       Total costs and expenses.................      199           388           462           70        295   
                                                   --------      --------      --------     -------    -------  
Loss from operations............................     (199)         (388)         (462)         (70)      (295)  
Equity in loss of BioMarin Pharmaceutical Inc...  (10,173)      (11,934)      (18,904)      (3,092)    (3,268)  
Gain on reduction of share ownership of BioMarin                                                                
  Pharmaceutical Inc............................   26,814         1,424        30,515          377      2,472   
   Interest income..............................      187           121           123           36          1   
                                                   --------      --------      --------     -------    -------  
   Net income (loss)............................ $ 16,629      $(10,777)     $ 11,272      $(2,749)   $(1,090)  
                                                   ========      ========      ========     =======    =======  
Earnings (loss) per share--basic................ $   0.54      $  (0.32)     $   0.33      $ (0.08)   $ (0.03)  
                                                   ========      ========      ========     =======    =======  
Earnings (loss) per share--diluted.............. $   0.50      $  (0.32)     $   0.33      $ (0.08)   $ (0.03)  
                                                   ========      ========      ========     =======    =======  
Weighted average number of shares--basic........   31,066        33,915        34,353       34,353     34,353   
                                                   ========      ========      ========     =======    =======  
Weighted average number of shares--diluted......   33,568        33,915        34,372       34,353     34,353   
                                                   ========      ========      ========     =======    =======  

                                                                [Download Table]

                                                   December 31,                 
                                                  ---------------   March 31,   
                                                   2000    2001        2002     
                                                  ------- ------- --------------
                                                  (in thousands)  (in thousands,
                                                                    unaudited)  
                                                                                
Balance sheet data:                                                             
Cash, cash equivalents and short-term investments $ 1,805 $ 2,444    $ 2,419    
Investment in BioMarin...........................  25,129  36,741     35,945    
Total assets.....................................  26,964  39,185     38,364    
Total shareholders' equity.......................  26,649  38,724     37,633    

--------                                                                        
(1) See notes to Glyko's financial statements for a description of the number   
of shares used in the computation of earnings per common share.         

15  

DEFM14A
29th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 29th
Transaction Risk Factors                                                        

  The transaction involves numerous risks and uncertainties. In evaluating the
arrangement, BioMarin stockholders and Glyko shareholders should carefully      
consider the risk factors disclosed under the heading "Risk Factors," as well   
as other information contained in this Joint Proxy Circular and the annexes     
hereto. These risks and uncertainties include those associated with the         
following:                                                                      

.   fluctuation in the actual dollar value of the BioMarin common stock the 
Glyko shareholders will receive in the transaction;                 

.   fluctuations in the market price of BioMarin common stock and Glyko     
common shares;                                                      

.   the impact on the trading price of BioMarin common stock of sales of    
     substantial amounts of BioMarin common stock following the closing of the
transaction;                                                        

.   required regulatory and court approvals for completing the transaction; 

.   actual or potential conflicts of interest involving directors and       
     executive officers of Glyko and BioMarin directors in connection with the
transaction; and                                                    

 .   a substantial contingent tax liability to BioMarin in connection with the
   liquidation or deemed liquidation of the BioMarin shares held by Glyko.

See "Risk Factors--Risks Relating to the Transaction Generally--For       
Consideration by BioMarin Stockholders and Glyko Shareholders."                 

BioMarin Risk Factors                                                           

An investment in BioMarin common stock involves a high degree of risk.    
BioMarin operates in a dynamic and rapidly changing industry that involves      
numerous risks and uncertainties. In evaluating the arrangement, Glyko          
shareholders should carefully consider the risk factors disclosed under the     
heading "Risk Factors," as well as other information contained in this Joint    
Proxy Circular and the annexes hereto. These risks and uncertainties include    
those associated with the following:                                            

.   BioMarin's continued incurrence of operating losses;                    

.   BioMarin's failure to obtain necessary capital;                         

.   BioMarin's failure to obtain regulatory approval to commercially        
manufacture or sell its future drug products;                       

.   the cost, length and uncertainty of results of preclinical studies and  
   clinical trials necessary for BioMarin to obtain regulatory approval to
market its products;                                                

.   the speed of the United States Food and Drug Administration (FDA) review
process for BioMarin's drug candidates;                             

.   BioMarin's failure to comply with manufacturing regulations;            

 .   BioMarin's failure to obtain orphan drug exclusivity for some of its drug
products;                                                           

.   the size of the target patient populations for some of BioMarin's drug  
products;                                                           

.   the failure to obtain adequate levels of reimbursement for BioMarin's   
drugs products by third-party payers;                               

.   the ability to protect BioMarin's proprietary technology;               

.   BioMarin's ability to challenge, and its success in challenging, certain
U.S. patents;                                                       

16  

DEFM14A
30th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 30th
.   the continuation of BioMarin's joint venture with Genzyme;              

.   the ability to manufacture BioMarin's drug products in sufficient       
quantities and at acceptable cost to support commercial sales;      

 .   the ability to increase BioMarin's marketing or distribution capabilities
or enter into agreements with third parties to do so;               

.   the failure to compete successfully;                                    

.   the failure to achieve expected milestones;                             

.   the failure to manage growth or to recruit and retain personnel;        

.   changes in the treatment of diseases;                                   

.   potential product liability lawsuits;                                   

.   the volatility of BioMarin's stock price;                               

.   actions by BioMarin's officers, directors and largest stockholder acting
together; and                                                       

.   anti-takeover provisions in BioMarin's charter documents.               

See "Risk Factors--Risks Relating to BioMarin--For Consideration by Glyko 
Shareholders."                                                                  

17  

DEFM14A
31st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 31st
COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA 

  The following tables set forth certain historical per share data of BioMarin
and Glyko and consolidated per share data on an unaudited pro forma basis after 
giving effect to the transaction. The following data should be read in          
conjunction with the separate historical consolidated financial statements of   
BioMarin attached to this Joint Proxy Circular as Annex I and the historical    
financial statements of Glyko attached to this Joint Proxy Circular as Annex J. 
With respect to Glyko, the United States GAAP figures have been derived from    
Glyko's financial statements prepared in accordance with United States GAAP and 
attached to this Joint Proxy Circular as Annex K. The unaudited pro forma       
consolidated per share data does not necessarily indicate the operating results 
that would have been achieved had the transaction been completed as of the      
beginning of the earliest period presented and should not be taken as           
representative of future operations. The results may have been different if the 
companies had always been consolidated. No dividends have ever been declared or 
paid on BioMarin common stock or Glyko common shares.                           

                                                        [Enlarge/Download Table]

                                                                                      Three Month         
                                                         Year Ended                  Period Ended         
                                                      December 31, 2001             March 31, 2002        
                                                 --------------------------  ---------------------------- 
                                                   BioMarin       Glyko        BioMarin        Glyko      
                                                 ------------ -------------- ------------ ----------------
                                                                                      (unaudited)         
                                                                     (in U.S. dollars)                    
                                                                                                          
Net income (loss) from continuing operations per                                                          
  common share--basic:                                                                                    
   Canadian GAAP................................       n/a        $ 0.33           n/a         $(0.03)    
   US GAAP......................................    $(1.40)       $(0.44)       $(0.51)        $(0.18)    
Net income (loss) from continuing operations per                                                          
  common share--diluted:                                                                                  
   Canadian GAAP................................       n/a        $ 0.33           n/a         $(0.03)    
   US GAAP......................................    $(1.40)       $(0.44)       $(0.51)        $(0.18)    

                                                                  Pro Forma Consolidated                  
                                                 -------------------------------------------------------- 
                                                          BioMarin                 Glyko Equivalent       
                                                 --------------------------  ---------------------------- 
                                                  Year Ended   Three Months   Year Ended    Three Months  
                                                 December 31,     Ended      December 31,      Ended      
                                                     2001     March 31, 2002     2001      March 31, 2002 
                                                 ------------ -------------- ------------ ----------------
                                                         (unaudited)                  (unaudited)         
                                                                     (in U.S. dollars)                    
Net income (loss) from continuing operations per                                                          
  common share--basic:                                                                                    
   Canadian GAAP................................       n/a           n/a           n/a            n/a     
   US GAAP......................................    $(1.19)       $(0.28)       $(0.39)        $(0.09)    
Net income (loss) from continuing operations per                                                          
  common share--diluted:                                                                                  
   Canadian GAAP................................       n/a           n/a           n/a            n/a     
   US GAAP......................................    $(1.19)       $(0.28)       $(0.39)        $(0.09)    

                                                                   At December 31, 2001                   
                                                 -------------------------------------------------------- 
                                                           Actual               Pro Forma Consolidated    
                                                 --------------------------  ---------------------------- 
                                                   BioMarin       Glyko        BioMarin   Glyko Equivalent
                                                 ------------ -------------- ------------ ----------------
                                                         (unaudited)                  (unaudited)         
                                                                     (in U.S. dollars)                    
Book value per share:                                                                                     
   Canadian GAAP................................       n/a        $ 1.13           n/a            n/a     
   US GAAP......................................    $ 3.04        $ 1.07        $ 3.01         $ 1.00     

                                                                     At March 31, 2002                    
                                                 -------------------------------------------------------- 
                                                           Actual               Pro Forma Consolidated    
                                                 --------------------------  ---------------------------- 
                                                   BioMarin       Glyko        BioMarin   Glyko Equivalent
                                                 ------------ -------------- ------------ ----------------
                                                         (unaudited)                  (unaudited)         
                                                                     (in U.S. dollars)                    
Book value per share                                                                                      
   Canadian GAAP................................       n/a        $ 1.10           n/a            n/a     
   US GAAP......................................    $ 2.71        $ 0.97        $ 2.69         $ 0.89     

18  

DEFM14A
32nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 32nd
COMPARATIVE MARKET PRICE AND TRADING VOLUME INFORMATION 

  BioMarin common stock is traded on Nasdaq and the Swiss SWX New Market under
the symbol "BMRN." Glyko common shares are traded on the Toronto Stock Exchange 
under the symbol "GBL." Since November 1993, Glyko's common shares have been    
listed on the OTC Bulletin Board under the symbol "GLYK." The trading of        
Glyko's common shares on the OTC Bulletin Board has been limited and sporadic.  
Glyko's common shares have been listed and traded on the Toronto Stock Exchange 
since December 1992.                                                            

 The following table sets forth, for the periods indicated, the high and low
sale prices per share and the average trading volume of BioMarin common stock   
as reported on Nasdaq.                                                          

                                                                [Download Table]

                                                Average
                                                Trading
                           High U.S.$ Low U.S.$ Volume 
                           ---------- --------- -------
                                                       
2000:                                                  
   Fiscal Quarters                                     
       First Quarter......   41.25      11.75   131,362
       Second Quarter.....   30.38      16.00    65,687
       Third Quarter......   21.86      15.75    54,268
       Fourth Quarter.....   18.50       6.94    30,702

2001:                                                  
   Fiscal Quarters                                     
       First Quarter......   13.25       6.56    67,387
       Second Quarter.....   13.29       7.50    56,189
       Third Quarter......   13.74       8.07    65,603
       Fourth Quarter.....   14.40       8.65   495,055

2002:                                                  
   January................   14.06      11.20   384,400
   February...............   12.96       9.71   424,158
   March..................   10.75       9.25   361,260
   April..................   10.50       5.56   426,427
   May....................    6.85       5.35   213,450
   June...................    6.80       4.00   403,105

 The following table sets forth, for the periods indicated, the high and low
sale prices per Glyko common share and average trading volume of Glyko common   
shares as reported on the Toronto Stock Exchange.                               

                                                                [Download Table]

                                                Average
                                                Trading
                           High Cdn.$ Low Cdn.$ Volume 
                           ---------- --------- -------
                                                       
2000:                                                  
   Fiscal Quarters                                     
       First Quarter......   15.00      5.20    90,625 
       Second Quarter.....   10.00      6.50    10,687 
       Third Quarter......    9.25      7.00    12,248 
       Fourth Quarter.....    8.50      3.25    18,273 

2001:                                                  
   Fiscal Quarters                                     
       First Quarter......    5.75      3.50    12,517 
       Second Quarter.....    6.45      3.85    16,930 
       Third Quarter......    7.00      3.75    15,823 
       Fourth Quarter.....    7.00      3.75    67,365 

2002:                                                  
   January................    7.20      5.15     6,945 
   February...............    6.40      5.05    11,140 
   March..................    5.90      4.51    11,715 
   April..................    5.00      2.85    18,470 
   May....................    3.59      2.50     7,389 
   June...................    3.00      1.55    68,300 

19  

DEFM14A
33rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 33rd
The following table shows the closing prices (i) per share of BioMarin    
common stock as reported on Nasdaq and (ii) per Glyko common share as reported  
on the Toronto Stock Exchange, on February 6, 2002, the business day preceding  
the public announcement that BioMarin and Glyko had entered into the            
Acquisition Agreement and on June 28, 2002. The table also includes the         
equivalent price per Glyko common share on those dates. This equivalent per     
share price reflects the value of the BioMarin common stock the Glyko           
shareholders would have received for each Glyko common share if the transaction 
had been completed on either of those dates, applying the exchange ratio of     
0.3309 of a share of BioMarin common stock for each Glyko common share.         

                                                                [Download Table]

                              Glyko         Glyko       BioMarin   Equivalent Price
                          Common Shares Common Shares Common Stock    Per Share    
                          ------------- ------------- ------------ ----------------
                             (Cdn.$)      (US.$)(1)     (U.S.$)        (U.S.$)     
                                                                                   
February 6, 2002.........     6.35          3.96         12.52           4.14      
June 28, 2002............     2.60          1.71          5.22           1.72      

--------                                                                        
(1) U.S. dollar price is based on the Bank of Canada Noon Rate on such day, as  
stated in the section entitled "Exchange Rates."                        

The market price of BioMarin common stock is subject to fluctuation due to
numerous market forces, with the result that the market value of the BioMarin   
common stock Glyko common shareholders will receive under the arrangement may   
increase or decrease prior to the implementation time of the arrangement.       
Shareholders are urged to obtain current market quotations for the Glyko common 
shares and the BioMarin common stock. Historical market prices are not          
necessarily indicative of future market prices.                                 

BioMarin Dividend Policy                                                        

BioMarin has not paid or declared dividends on its shares and does not    
anticipate paying dividends in the foreseeable future.                          

Glyko Dividend Policy                                                           

Glyko has not paid or declared dividends on its common shares and does not
anticipate paying dividends in the foreseeable future.                          

EXCHANGE RATES  

 The following table sets forth, for each period indicated, the high and low
exchange rates for one Canadian dollar expressed in U.S. dollars, the average   
of such exchange rates during such period, and the exchange rate at the end of  
such period, based upon the Bank of Canada Noon Rate and generally reflecting   
the exchange rates for transactions of $1 million or more:                      

                                                                [Download Table]

                     Three Month                                    
                     Period Ended      Year Ended December 31,      
                      March 31,   ----------------------------------
                         2002      2001   2000   1999   1998   1997 
                     ------------ ------ ------ ------ ------ ------
                                                                    
High................    0.6342    0.6695 0.6973 0.6929 0.7105 0.7489
Low.................    0.6199    0.6242 0.6413 0.6537 0.6343 0.6948
Average.............    0.6271    0.6500 0.6733 0.6731 0.6741 0.7223
Period End..........    0.6275    0.6279 0.6460 0.6929 0.6534 0.6997

On February 6, 2002, the last trading day prior to the announcement of the
transaction, the exchange rate for one Canadian dollar expressed in U.S.        
dollars based on the Bank of Canada Noon Rate was $0.6234. On June 28, 2002,    
the exchange rate for one Canadian dollar expressed in U.S. dollars based on    
the Bank of Canada Noon Rate was $0.6585.                                       

20  

DEFM14A
34th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 34th
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS  
IN THIS DOCUMENT  

This Joint Proxy Circular includes "forward-looking statements" within the
meaning of the United States Securities Act of 1933 and Section 21E of the      
United States Securities Exchange Act of 1934. All statements other than        
statements of historical fact included in this Joint Proxy Circular are         
forward-looking statements. Such forward-looking statements have been           
identified in this Joint Proxy Circular using words such as "anticipates,"      
"believes," "could," "estimates," "expects," "intends," "may," "plans,"         
"potential," "predicts," "should," or "will" or the negative of such terms or   
other comparable terminology. These statements are based on the beliefs of      
BioMarin and Glyko as well as assumptions BioMarin and Glyko made using         
information currently available to them. Because these statements reflect       
BioMarin and Glyko's current views concerning future events, these statements   
involve risks, uncertainties and assumptions.                                   

Although BioMarin and Glyko believe that the expectations reflected in the
forward-looking statements are reasonable, they can give no assurance that the  
expectations will prove to have been correct. Important factors that could      
cause actual results to differ materially from these expectations are disclosed 
in this Joint Proxy Circular. Moreover, neither BioMarin nor Glyko nor any      
other person assumes responsibility for the accuracy and completeness of such   
statements. Neither BioMarin nor Glyko is under any duty to update any of the   
forward-looking statements after the date of this Joint Proxy Circular to       
conform such statements to actual results, unless required by law.              

21  

DEFM14A
35th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 35th
RISK FACTORS  

  In addition to the other information contained in this Joint Proxy Circular,
the following risk factors should be carefully considered before deciding how   
to vote your securities. They should be reviewed together with the other        
information in this Joint Proxy Circular. Some of these risk factors relate     
directly to the transaction, while others relate to BioMarin, Glyko or the      
consolidated company's business independent of the transaction.                 

Risks Relating to the Transaction Generally -- For Consideration by BioMarin    
Stockholders and Glyko Shareholders                                             

The market price of both BioMarin common stock and Glyko common shares may
fluctuate and the actual dollar value of the BioMarin common stock that Glyko   
shareholders receive when the transaction is completed may be less than it is   
on the date that Glyko shareholders vote on the transaction.                    

  Upon the arrangement's completion, each Glyko common share will be exchanged
for 0.3309 of a share of BioMarin common stock. The exchange ratio for BioMarin 
shares will not be adjusted for changes in the market price of either Glyko     
common shares or shares of BioMarin common stock. In addition, neither Glyko    
nor BioMarin may terminate the Acquisition Agreement solely because of changes  
in the market price of BioMarin common stock or Glyko common shares.            

During the period prior to the expected completion of the transaction, the
market price for BioMarin common stock and Glyko common shares could fluctuate  
significantly in response to various factors and events although it appears     
that on a historical basis the trading price of the Glyko common shares has     
within in a broad range moved in correlation to the trading price of the        
BioMarin common stock. These factors and events include the differences between 
BioMarin's and Glyko's actual financial or operating results and those expected 
by investors and analysts, changes in analysts' projections or recommendations, 
changes in general economic or market conditions and broad market fluctuations. 
Due to these uncertainties, the market value of BioMarin common stock that the  
holders of Glyko common shares will receive upon consummation of the            
transaction may be less than the market value of the Glyko common shares held   
by such shareholders prior to the implementation time of the arrangement,       
including the date Glyko shareholders vote on the transaction.                  

Sales of substantial amounts of BioMarin common stock in the public market
following the closing of the transaction may adversely effect the prevailing    
price of BioMarin common stock.                                                 

 Up to 11,367,617 shares of BioMarin common stock to be issued to holders of
Glyko common shares in the transaction will be issued in reliance upon the      
exemption available pursuant to Section 3(a)(10) of the United States           
Securities Act of 1933 and exemptions provided under the securities laws of     
each state of the United States. Except for certain limitations on resale by    
affiliates of Glyko or BioMarin, such shares will be freely tradeable. Sales of 
substantial amounts of BioMarin common stock in the public market following the 
closing of the transaction may adversely effect the prevailing price of         
BioMarin common stock.                                                          

  BioMarin and Glyko may be unable to obtain the required regulatory and court
approvals for completing the transaction and if these approvals are not         
obtained, the transaction cannot be completed.                                  

The arrangement and the transactions contemplated by the Acquisition      
Agreement are subject to the following regulatory approvals and filings: (i)    
approval of the Registrar under the Company Act (British Columbia) to the       
continuance of Glyko under the laws of British Columbia; (ii) approval of the   
Director under the Canada Business Corporations Act to the continuance of Glyko 
under the laws of British Columbia; and (iii) the filing of an application for  
the listing of additional shares with Nasdaq regarding the shares of BioMarin   
common stock issuable in the transaction.                                       

Even if all regulatory approvals have been obtained, the laws of the U.S. 
and certain other jurisdictions permit federal, state and foreign governmental  
entities and any private person to challenge the transaction at any time before 
or after its completion.                                                        

22  

DEFM14A
36th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 36th
In addition to regulatory approvals, the proposed arrangement under the   
Canada Business Corporations Act requires approval by the Superior Court of     
Justice (Ontario). Prior to the mailing of this Joint Proxy Circular, Glyko     
obtained an interim order providing for the calling and holding of the Glyko    
special meeting and other procedural matters. Subject to the approval of the    
Glyko arrangement resolution and the Glyko continuance resolution at the Glyko  
special meeting and the approval of the transaction, including the issuance of  
shares of BioMarin common stock, at the BioMarin annual meeting, the hearing to 
obtain a final order of the court is expected to take place on or about August  
16, 2002 at 10:00 a.m. (Toronto time) at the Toronto Courthouse at              
393 University Avenue, Toronto, Ontario.                                        

BioMarin's executive officers and directors and Glyko's executive officers
and directors have interests that may influence them to support and approve the 
transaction.                                                                    

Certain members of the BioMarin board of directors and certain members of 
the management and board of directors of Glyko have certain interests in the    
transaction that may present them with actual or potential conflicts of         
interest in connection with the transaction. Those interests include:           

.   the receipt by directors of Glyko, two directors and two executive      
   officers of BioMarin (in their capacities as shareholders of Glyko), of
  shares of BioMarin common stock in exchange for Glyko common shares in
   the transaction. These directors and officers will receive the same per
share consideration as other Glyko shareholders in the transaction; 

.   the receipt by directors and officers of Glyko (the only holders of     
   options for Glyko common shares) of options to purchase BioMarin common
stock in exchange for options to purchase Glyko common shares; and  

.   a promise by BioMarin to provide directors' and officers' liability     
insurance for a specified period to Glyko's board of directors and  
management.                                                         

Furthermore, the Acquisition Agreement provides executive officers and    
directors of Glyko with continuing indemnification rights upon terms and        
conditions consistent with those in effect on the date of the Acquisition       
Agreement.                                                                      

For the above reasons, the directors and officers of Glyko could be more  
likely to vote to approve the Glyko arrangement resolution and the Glyko        
continuance resolution than if they did not hold these interests. Glyko         
shareholders should consider whether these interests may have influenced these  
directors and officers to support or recommend the transaction. The Glyko board 
of directors was aware of these interests when it approved the Acquisition      
Agreement.                                                                      

Similarly, certain members of the BioMarin board of directors who are also
shareholders of Glyko, could have been more likely to approve the transaction   
in their capacity as directors of BioMarin given their interests in Glyko.      
Accordingly, such members of the BioMarin board of directors abstained from the 
vote taken by the BioMarin board of directors with respect to the transaction   
and the transaction was approved only by the disinterested members of the       
BioMarin board.                                                                 

If Glyko (and indirectly BioMarin) disposes of the BioMarin shares held by
Glyko, then the capital gain tax liability which Glyko (and indirectly          
BioMarin) would be obligated to pay under Canadian federal and provincial       
income tax laws or may be obligated to pay under United States federal tax      
principles may have a material adverse effect on BioMarin.                      

  After giving effect to the transactions described herein, upon a disposition
of the BioMarin shares held by Glyko, Glyko (and indirectly BioMarin) would     
recognize a gain under Canadian federal and provincial income tax laws (if the  
disposition is taxable) and may recognize a gain under United States federal    
income tax laws. If the disposition is taxable, the potential gain for Canadian 
tax purposes as of June 28, 2002, based upon the per                            

23  

DEFM14A
37th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 37th
share closing price of BioMarin's common stock as of such date (as reported on  
the Nasdaq), is approximately $32 million, as calculated by BioMarin. Under     
current Canadian federal and provincial income tax laws and tax rates currently 
in effect, Glyko (and indirectly BioMarin) would be obligated to pay Canadian   
federal and provincial income tax at a combined rate of approximately 19% of    
the capital gain (subject to the deduction of any available losses in           
accordance with Canadian income tax laws). The timing and amount of the gain    
subject to tax under United States federal income tax principles would vary     
based on the specific facts surrounding the liquidation or deemed liquidation   
event. If Glyko (and indirectly BioMarin) were to dispose of the BioMarin       
shares held by Glyko, then the capital gains tax liability which Glyko (and     
indirectly BioMarin) may be obligated to pay under Canadian federal and         
provincial income tax laws (assuming the disposition is taxable for Canadian    
purposes) or may be obligated to pay under United States federal tax principles 
may have a material adverse effect on BioMarin. However, the events which would 
trigger the recognition of gain by Glyko (and indirectly BioMarin) are          
completely within the discretion and control of BioMarin, and BioMarin has no   
intention of implementing or effecting any of these events. In addition, in the 
future, if BioMarin remains a "foreign affiliate" of Glyko, and BioMarin        
generates sufficient after-tax net earnings, the contingent capital gains tax   
liability may be limited or eliminated under Canadian federal and provincial    
income tax laws in certain circumstances based on an election provided in the   
Income Tax Act (Canada).                                                        

Risks Relating to BioMarin -- For Consideration by Glyko Shareholders           

By voting in favor of the Glyko arrangement resolution and the Glyko      
continuance resolution, Glyko shareholders will be choosing to invest directly  
in BioMarin common stock. An investment in BioMarin common stock involves a     
substantial amount of risk. To a certain extent, Glyko shareholders are         
currently subject to many of these risks indirectly because Glyko's principal   
asset is its ownership of shares of BioMarin common stock. However, Glyko       
shareholders currently hold an interest in a separate publicly traded company   
which appreciates or depreciates in value separate from the trading price of    
BioMarin common stock. In addition, historically, the trading price of Glyko    
common shares has moved only within a broad range in correlation with the       
trading price of BioMarin common stock. Accordingly, Glyko shareholders should  
carefully review the risks relating to BioMarin in deciding how to vote their   
Glyko common shares.                                                            

If BioMarin continues to incur operating losses for a period longer than  
anticipated, it may be unable to continue its operations at planned levels and  
may be forced to reduce or discontinue operations.                              

 BioMarin is in an early stage of development and has operated at a net loss
since it was formed. Since BioMarin began operations in March 1997, BioMarin    
has been engaged primarily in research and development. BioMarin has no sales   
revenues from any of its product candidates. As of March 31, 2002, BioMarin had 
an accumulated deficit of approximately $174.7 million. BioMarin expects to     
continue to operate at a net loss for the foreseeable future. BioMarin's future 
profitability depends on receiving regulatory approval of its product           
candidates and its ability to successfully manufacture and market any approved  
drugs, either by itself or jointly with others. The extent of BioMarin's future 
losses and the timing of profitability are highly uncertain. If BioMarin fails  
to become profitable or is unable to sustain profitability on a continuing      
basis, then it may be unable to continue its operations.                        

  If BioMarin fails to obtain the capital necessary to fund its operations, it
will be unable to complete its product development programs.                    

 In the future, BioMarin may need to raise substantial additional capital to
fund operations. BioMarin may be unable to raise additional financing when      
needed due to a variety of factors, including BioMarin's financial condition,   
the status of its product programs, and the general condition of the financial  
markets. If BioMarin fails to raise additional financing as it needs such       
funds, BioMarin will have to delay or terminate some or all of its product      
development programs.                                                           

24  

DEFM14A
38th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 38th
  BioMarin expects to continue to spend substantial amounts of capital for its
operations for the foreseeable future. The amount of capital BioMarin will need 
depends on many factors, including:                                             

.   the progress, timing and scope of BioMarin's preclinical studies and    
clinical trials;                                                    

.   the time and cost necessary to obtain regulatory approvals;             

.   the time and cost necessary to develop commercial manufacturing         
processes, including quality systems and to build or acquire        
manufacturing capabilities;                                         

.   the time and cost necessary to respond to technological and market      
developments; and                                                   

.   any changes made or new developments in BioMarin's existing             
  collaborative, licensing and other commercial relationships or any new
     collaborative, licensing and other commercial relationships that BioMarin
may establish.                                                      

  Moreover, BioMarin's fixed expenses such as rent, license payments and other
contractual commitments are substantial and will increase in the future. These  
fixed expenses will increase because BioMarin may enter into:                   

.   additional leases for new facilities and capital equipment;             

.   additional licenses and collaborative agreements;                       

.   additional contracts for consulting, maintenance and administrative     
services; and                                                       

.   additional contracts for product manufacturing.                         

 BioMarin believes that its cash, cash equivalents and short term investment
securities balances at March 31, 2002 will be sufficient to meet its operating  
and capital requirements through 2003. These estimates are based on assumptions 
and estimates, which may prove to be wrong. As a result, BioMarin may need or   
choose to obtain additional financing during that time.                         

 If BioMarin fails to obtain regulatory approval to commercially manufacture
or sell any of its future drug products, or if approval is delayed, BioMarin    
will be unable to generate revenue from the sale of its products, its potential 
for generating positive cash flow will be diminished and the capital necessary  
to fund its operations will increase.                                           

BioMarin must obtain regulatory approval before marketing or selling its  
drug products in the U.S. and in foreign jurisdictions. In the United States,   
BioMarin must obtain FDA approval for each drug that it intends to              
commercialize. The FDA approval process is typically lengthy and expensive, and 
approval is never certain. Products distributed abroad are also subject to      
foreign government regulation. None of BioMarin's drug products has received    
regulatory approval to be commercially marketed and sold. If BioMarin fails to  
obtain regulatory approval, it will be unable to market and sell its drug       
products. Because of the risks and uncertainties in biopharmaceutical           
development, BioMarin's drug products could take a significantly longer time to 
gain regulatory approval than it expects or may never gain approval. If         
regulatory approvals are not obtained or are delayed, the credibility of        
BioMarin's management and the value of the company will be adversely affected.  
Additionally, BioMarin will be unable to generate revenue from the sale of its  
products and its potential for generating positive cash flow will be diminished 
and the capital necessary to fund its operations will be increased.             

To obtain regulatory approval to market BioMarin's products, preclinical  
studies and costly and lengthy clinical trials will be required, and the        
results of the studies and trials are highly uncertain.                         

As part of the regulatory approval process, BioMarin must conduct, at its 
own expense, preclinical studies in the laboratory on animals and clinical      
trials on humans for each drug product. BioMarin expects the number of          
preclinical studies and clinical trials that the regulatory authorities will    
require will vary depending on the drug                                         

25  

DEFM14A
39th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 39th
product, the disease or condition the drug is being developed to address and    
regulations applicable to the particular drug. BioMarin may need to perform     
multiple preclinical studies using various doses and formulations before it can 
begin clinical trials, which could result in delays in its ability to market    
any of its drug products. Furthermore, even if BioMarin obtains favorable       
results in preclinical studies on animals, the results in humans may be         
significantly different.                                                        

After BioMarin has conducted preclinical studies on animals, it must      
demonstrate that its drug products are safe and efficacious for use on the      
target human patients in order to receive regulatory approval for commercial    
sale. Adverse or inconclusive clinical results would stop BioMarin from filing  
for regulatory approval of its drug products. Additional factors that can cause 
delay or termination of BioMarin's clinical trials include:                     

.   slow or insufficient patient enrollment;                                

.   slow recruitment of, and completion of necessary institutional approvals
at clinical sites;                                                  

.   longer treatment time required to demonstrate efficacy;                 

.   lack of sufficient supplies of the product candidate;                   

.   adverse medical events or side effects in treated patients;             

.   lack of effectiveness of the product candidate being tested; and        

.   regulatory requests for additional clinical trials.                     

Typically, if a drug product is intended to treat a chronic disease, as is
the case with most of the product candidates BioMarin is developing, safety and 
efficacy data must be gathered over an extended period of time, which can range 
from six months to three years or more.                                         

In May 2001, BioMarin completed a 24-month patient evaluation for the     
initial clinical trial of its lead drug product, Aldurazyme, for the treatment  
of MPS I. Two of the original ten patients enrolled in this trial died in 2000. 
One of these patients received 103 weeks of Aldurazyme treatment and the other  
received 137 weeks of treatment. One of the original forty-five patients who    
completed the Phase 3 clinical trial died after 16 weeks of the Phase 3         
extension study. One patient treated under a single-patient use protocol died   
after 31 weeks of Aldurazyme treatment. Based on medical data collected from    
clinical investigative sites, none of these cases directly implicated treatment 
with Aldurazyme as the cause of death. If cases of patient complications or     
death are ultimately attributed to Aldurazyme, BioMarin's chances of            
commercializing this drug would be seriously compromised.                       

The fast track designation for BioMarin's product candidates may not      
actually lead to a faster review process and a delay in the review process or   
approval of its products will delay revenue from the sale of the products and   
will increase the capital necessary to fund these programs.                     

Aldurazyme and Aryplase have obtained fast track designations, which      
provides certain advantageous procedures and guidelines with respect to the     
review by the FDA of the BLA for these products and which may result in         
BioMarin's receipt of an initial response from the FDA earlier than would be    
received if these products had not received a fast track designation. However,  
these procedures and guidelines do not guarantee that the total review process  
will be shorter than, or that approval will be obtained, if at all, earlier     
than, would be the case if the products had not received fast track             
designation. If the review process or approval for either product is delayed,   
realizing revenue from the sale of these products will be delayed and the       
capital necessary to fund these programs will be increased.                     

BioMarin will not be able to sell its drug products if it fails to comply 
with manufacturing regulations.                                                 

Before BioMarin can begin commercial manufacture of its drug products, it 
must obtain regulatory approval of its manufacturing facility and process. In   
addition, manufacture of BioMarin's drug products must comply                   

26  

DEFM14A
40th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 40th
with the FDA's current Good Manufacturing Practices regulations, commonly known 
as cGMP. The cGMP regulations govern quality control and documentation policies 
and procedures. BioMarin's manufacturing facilities are continuously subject to 
inspection by the FDA, the State of California and foreign regulatory           
authorities, before and after product approval. BioMarin's Galli Drive and Bel  
Marin Keys Boulevard manufacturing facilities have been inspected and licensed  
by the State of California for clinical pharmaceutical manufacture. Due to the  
complexity of the processes used to manufacture its products, BioMarin may be   
unable to pass federal or international regulatory inspections in a cost        
effective manner. For the same reason, any potential third party manufacturer   
of BioMarin's drug products may be unable to comply with cGMP regulations in a  
cost effective manner.                                                          

BioMarin must pass federal, state and European regulatory inspections, and
it must manufacture process qualification batches to final specifications under 
cGMP controls for each of its drug products before the marketing applications   
can be approved. Although BioMarin has completed process qualification batches  
for Aldurazyme, these batches may be rejected by the regulatory authorities,    
and BioMarin may be unable to manufacture the process qualification batches for 
BioMarin's other products or pass the inspections in a timely manner, if at all.

If BioMarin fails to obtain orphan drug exclusivity for some of its       
products, BioMarin's competitors may sell products to treat the same conditions 
and its revenues will be reduced.                                               

As part of BioMarin's business strategy, it intends to develop some drugs 
that may be eligible for FDA and European Community orphan drug designation.    
Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if 
it is a drug intended to treat a rare disease or condition, defined as a        
patient population of less than 200,000 in the United States. The company that  
first obtains FDA approval for a designated orphan drug for a given rare        
disease receives marketing exclusivity for use of that drug for the stated      
condition for a period of seven years. However, different drugs can be approved 
for the same condition. Similar regulations are available in the European       
Community with a ten year period of market exclusivity.                         

Because the extent and scope of patent protection for BioMarin's drug     
products is limited, orphan drug designation is particularly important for its  
products that are eligible for orphan drug designation. BioMarin plans to rely  
on the exclusivity period under the orphan drug designation to maintain a       
competitive position. If BioMarin does not obtain orphan drug exclusivity for   
its drug products, which do not have patent protection, BioMarin's competitors  
may then sell the same drug to treat the same condition.                        

  Even though BioMarin has obtained orphan drug designation for certain of its
product candidates and even if it obtains orphan drug designation for other     
products it develops, due to the uncertainties associated with developing       
pharmaceutical products, BioMarin may not be the first to obtain marketing      
approval for any orphan indication or, if BioMarin is the first, that           
exclusivity would effectively protect the product from competition. Orphan drug 
designation neither shortens the development time or regulatory review time of  
a drug nor gives the drug any advantage in the regulatory review or approval    
process.                                                                        

Because the target patient populations for some of BioMarin's products are
small, it must achieve significant market share and obtain high per-patient     
prices for its products to achieve profitability.                               

Two of BioMarin's lead drug candidates, Aldurazyme and Aryplase, target   
diseases with small patient populations. As a result, BioMarin's per-patient    
prices must be relatively high in order to recover its development costs and    
achieve profitability. Aldurazyme targets patients with MPS I and Aryplase      
targets patients with MPS VI. BioMarin estimates that there are approximately   
3,400 patients with MPS I and 1,100 patients with MPS VI in the developed       
world. BioMarin believes that it will need to market worldwide to achieve       
significant market share. In addition, BioMarin is developing other drug        
candidates to treat conditions, such as other genetic diseases and serious burn 
wounds, with small patient populations. Due to the expected costs of treatment  
for                                                                             

27  

DEFM14A
41st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 41st
Aldurazyme and Aryplase, BioMarin may be unable to obtain sufficient market     
share for its drug products at a price high enough to achieve profitability.    

 If BioMarin fails to obtain an adequate level of reimbursement for its drug
products by third-party payers, the sales of its drugs would be adversely       
affected or there may be no commercially viable market for its products.        

The course of treatment for patients with MPS I using Aldurazyme and for  
patients with MPS VI using Aryplase is expected to be expensive. BioMarin       
expects patients to need treatment throughout their lifetimes. BioMarin expects 
that most families of patients will not be capable of paying for this treatment 
themselves. There will be no commercially viable market for Aldurazyme or       
Aryplase without reimbursement from third-party payers. Additionally, even if   
there is a commercially viable market, if the level of reimbursement is below   
BioMarin's expectations, its revenues and gross margins will be adversely       
affected.                                                                       

Third-party payers, such as government or private health care insurers,   
carefully review and increasingly challenge the prices charged for drugs.       
Reimbursement rates from private companies vary depending on the third-party    
payer, the insurance plan and other factors. Reimbursement systems in           
international markets vary significantly by country and by region, and          
reimbursement approvals must be obtained on a country-by-country basis.         

BioMarin currently has no expertise obtaining reimbursement. BioMarin     
expects to rely on the expertise of its joint venture partner Genzyme to obtain 
reimbursement for the costs of Aldurazyme. In addition, BioMarin will need to   
develop its own reimbursement expertise for future drug candidates unless it    
enters into collaborations with other companies with the necessary expertise.   
BioMarin will not know what the reimbursement rates will be until it is ready   
to market the product and it actually negotiates the rates. If BioMarin is      
unable to obtain sufficiently high reimbursement rates, its products may not be 
commercially viable or BioMarin's future revenues and gross margins may be      
adversely affected.                                                             

BioMarin expects that, in the future, reimbursement will be increasingly  
restricted both in the United States and internationally. The escalating cost   
of health care has led to increased pressure on the health care industry to     
reduce costs. Governmental and private third-party payers have proposed health  
care reforms and cost reductions. A number of federal and state proposals to    
control the cost of health care, including the cost of drug treatments, have    
been made in the United States. In some foreign markets, the government         
controls the pricing which would affect the profitability of drugs. Current     
government regulations and possible future legislation regarding health care    
may adversely affect reimbursement for medical treatment by third-party payers, 
which may render BioMarin's products not commercially viable or may adversely   
affect BioMarin's future revenues and gross margins.                            

If BioMarin is unable to protect its proprietary technology, it may not be
able to compete as effectively.                                                 

Where appropriate, BioMarin seeks patent protection for certain aspects of
its technology. Patent protection may not be available for some of the enzymes  
BioMarin is developing. If BioMarin must spend significant time and money       
protecting its patents, designing around patents held by others or licensing,   
for large fees, patents or other proprietary rights held by others, BioMarin's  
business and financial prospects may be harmed.                                 

The patent positions of biotechnology products are complex and uncertain. 
The scope and extent of patent protection for some of BioMarin's products are   
particularly uncertain because key information on some of the enzymes it is     
developing has existed in the public domain for many years. Other parties have  
published the structure of the enzymes, the methods for purifying or producing  
the enzymes or the methods of treatment. The composition and genetic sequences  
of animal and/or human versions of many of BioMarin's enzymes have been         
published and are believed to be in the public domain. The composition and      
genetic sequences of other MPS                                                  

28  

DEFM14A
42nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 42nd
enzymes that BioMarin intends to develop as products have also been published.  
Publication of this information may prevent BioMarin from obtaining             
composition-of-matter patents, which are generally believed to offer the        
strongest patent protection. For enzymes with no prospect of broad              
composition-of-matter patents, other forms of patent protection or orphan drug  
status may provide BioMarin with a competitive advantage. As a result of these  
uncertainties, investors should not rely on patents as a means of protecting    
BioMarin's product candidates, including Aldurazyme.                            

 BioMarin owns or licenses patents and patent applications to certain of its
product candidates. However, these patents and patent applications do not       
ensure the protection of BioMarin's intellectual property for a number of other 
reasons, including the following:                                               

.   BioMarin does not know whether its patent applications will result in   
     issued patents. For example, BioMarin may not have developed a method for
treating a disease before others developed similar methods.         

.   Competitors may interfere with BioMarin's patent process in a variety of
ways. Competitors may claim that they invented the claimed invention
     prior to BioMarin. Competitors may also claim that BioMarin is infringing
   on their patents and therefore cannot practice BioMarin's technology as
    claimed under BioMarin's patent. Competitors may also contest BioMarin's
patents by showing the patent examiner that the invention was not   
     original, was not novel or was obvious. In litigation, a competitor could
claim that BioMarin's issued patents are not valid for a number of  
reasons. If a court agrees, BioMarin would lose that patent. As a   
company, BioMarin has no meaningful experience with competitors     
interfering with BioMarin's patents or patent applications.         

.   Enforcing patents is expensive and may absorb significant time of       
    BioMarin's management. Management would spend less time and resources on
developing products, which could increase BioMarin's research and   
development expense and delay product programs.                     

.   Receipt of a patent may not provide much practical protection. If       
  BioMarin receives a patent with a narrow scope, then it will be easier
 for competitors to design products that do not infringe on BioMarin's
patent.                                                             

In addition, competitors also seek patent protection for their technology.
Due to the number of patents in BioMarin's field of technology, BioMarin cannot 
be assured that it does not infringe on those patents or that it will not       
infringe on patents granted in the future. If a patent holder believes          
BioMarin's product infringes on their patent, the patent holder may sue         
BioMarin even if BioMarin has received patent protection for BioMarin's         
technology. If someone else claims BioMarin infringes on their technology,      
BioMarin would face a number of issues, including the following:                

.   Defending a lawsuit takes significant time and can be very expensive.   

.   If the court decides that BioMarin's product infringes on the           
 competitor's patent, BioMarin may have to pay substantial damages for
past infringement.                                                  

.   The court may prohibit BioMarin from selling or licensing the product   
unless the patent holder licenses the patent to BioMarin. The patent
holder is not required to grant BioMarin a license. If a license is 
available, BioMarin may have to pay substantial royalties or grant  
cross-licenses to BioMarin's patents.                               

.   Redesigning BioMarin's product so it does not infringe may not be       
possible or could require substantial funds and time.               

It is also unclear whether BioMarin's trade secrets will provide useful   
protection. While BioMarin uses reasonable efforts to protect its trade         
secrets, its employees or consultants may unintentionally or willfully disclose 
BioMarin's information to competitors. Enforcing a claim that someone else      
illegally obtained and is using BioMarin's trade secrets, like patent           
litigation, is expensive and time consuming, and the outcome is                 

29  

DEFM14A
43rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 43rd
unpredictable. In addition, courts outside the United States are sometimes less 
willing to protect trade secrets. BioMarin's competitors may independently      
develop equivalent knowledge, methods and know-how.                             

BioMarin may also support and collaborate in research conducted by        
government organizations or by universities. These government organizations and 
universities may be unwilling to grant BioMarin any exclusive rights to         
technology or products derived from these collaborations prior to entering into 
the relationship. If BioMarin does not obtain required licenses or rights, it   
could encounter delays in product development while BioMarin attempts to design 
around other patents or even be prohibited from developing, manufacturing or    
selling products requiring these licenses. There is also a risk that disputes   
may arise as to the rights to technology or products developed in collaboration 
with other parties.                                                             

The United States Patent and Trademark Office recently issued two patents 
that relate to (alpha)-L-iduronidase. If BioMarin is not able to successfully   
challenge these patents, it may be prevented from producing Aldurazyme unless   
and until it obtains a license.                                                 

The United States Patent and Trademark Office recently issued two patents 
that include composition of matter and method of use claims for recombinant     
(alpha)-L-iduronidase. BioMarin's lead drug product, Aldurazyme, is based on    
recombinant (alpha)-L-iduronidase. BioMarin believes that these patents are     
invalid on a number of grounds. A corresponding patent application was filed in 
the European Patent Office claiming composition of matter for recombinant       
(alpha)-L-iduronidase, and it was rejected over prior art and withdrawn and     
cannot be refiled. Nonetheless, under U.S. law, issued patents are entitled to  
a presumption of validity, and BioMarin's challenges to the U.S. patents may be 
unsuccessful. Even if BioMarin is successful, challenging the U.S. patents may  
be expensive, require BioMarin's management to devote significant time to this  
effort and may delay commercialization of Aldurazyme in the United States.      

 The patent holder has granted an exclusive license for products relating to
these patents to one of BioMarin's competitors. If BioMarin is unable to        
successfully challenge the patents, it may be unable to produce Aldurazyme in   
the United States unless it can obtain a sublicense from the current licensee.  
The current licensee is not required to grant BioMarin a license and even if a  
license is available, BioMarin may have to pay substantial license fees, which  
could materially reduce potential profits from the eventual sale of Aldurazyme. 

 If BioMarin's joint venture with Genzyme were terminated, BioMarin could be
barred from commercializing Aldurazyme or BioMarin's ability to commercialize   
Aldurazyme would be delayed or diminished.                                      

BioMarin is relying on Genzyme to apply the expertise it has developed    
through the launch and sale of other enzyme-based products to the marketing of  
BioMarin's initial drug product, Aldurazyme. BioMarin has no experience         
selling, marketing or obtaining reimbursement for pharmaceutical products. In   
addition, without Genzyme, BioMarin would be required to pursue foreign         
regulatory approvals. BioMarin has no experience in seeking foreign regulatory  
approvals.                                                                      

Either BioMarin or Genzyme may terminate the joint venture for specified  
reasons, including if the other party is in material breach of the agreement or 
has experienced a change of control or has declared bankruptcy and also is in   
breach of the agreement. Although BioMarin is not currently in breach of the    
joint venture agreement and BioMarin believes that Genzyme is not currently in  
breach of the joint venture agreement, there is a risk that either Genzyme or   
BioMarin could breach the agreement in the future. Either party may also        
terminate the agreement upon one-year prior written notice for any reason.      
Furthermore, BioMarin may terminate the joint venture if Genzyme fails to       
fulfill its contractual obligation to pay BioMarin $12.1 million in cash upon   
the approval of the BLA for Aldurazyme.                                         

  If the joint venture is terminated for breach, the non-breaching party would
be granted, exclusively, all of the rights to Aldurazyme and any related        
intellectual property and regulatory approvals and would be obligated to        

30  

DEFM14A
44th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 44th
buy out the breaching party's interest in the joint venture. If BioMarin is the 
breaching party, it would lose its rights to Aldurazyme and the related         
intellectual property and regulatory approvals. If the joint venture is         
terminated without cause, the non-terminating party would have the option,      
exercisable for one year, to buy out the terminating party's interest in the    
joint venture and obtain all rights to Aldurazyme exclusively. In the event of  
termination of the buy out option without exercise by the non-terminating party 
as described above, all right and title to Aldurazyme is to be sold to the      
highest bidder, with the proceeds to be split equally between Genzyme and       
BioMarin.                                                                       

If the joint venture is terminated by either party because the other      
declared bankruptcy and is also in breach of the agreement, the terminating     
party would be obligated to buy out the other and would obtain all rights to    
Aldurazyme exclusively. If the joint venture is terminated by a party because   
the other party experienced a change of control, the terminating party shall    
notify the other party, the offeree, of its intent to buy out the offeree's     
interest in the joint venture for a stated amount set by the terminating party  
at its discretion. The offeree must then either accept this offer or agree to   
buy the terminating party's interest in the joint venture on those same terms.  
The party who buys out the other would then have exclusive rights to Aldurazyme.

If BioMarin were obligated, or given the option, to buy out Genzyme's     
interest in the joint venture, and gain exclusive rights to Aldurazyme,         
BioMarin may not have sufficient funds to do so and BioMarin may not be able to 
obtain the financing to do so. If BioMarin fails to buy out Genzyme's interest, 
BioMarin may be held in breach of the agreement and may lose any claim to the   
rights to Aldurazyme and the related intellectual property and regulatory       
approvals. BioMarin would then effectively be prohibited from developing and    
commercializing the product.                                                    

Termination of the joint venture in which BioMarin retains the rights to  
Aldurazyme could cause BioMarin significant delays in product launch in the     
United States, difficulties in obtaining third-party reimbursement and delays   
or failure to obtain foreign regulatory approval, any of which could hurt its   
business and results of operations. Since Genzyme funds 50% of the joint        
venture's operating expenses, the termination of the joint venture would double 
BioMarin's financial burden and reduce the funds available to it for other      
product programs.                                                               

If BioMarin is unable to manufacture its drug products in sufficient      
quantities and at acceptable cost, BioMarin may be unable to meet demand for    
its products and lose potential revenues or have reduced margins.               

Although BioMarin has successfully manufactured Aldurazyme at commercial  
scale within BioMarin's cost parameters, due to the complexity of manufacturing 
its products BioMarin may not be able to manufacture any other drug product     
successfully with a commercially viable process or at a scale large enough to   
support their respective commercial markets or at acceptable margins.           

BioMarin's manufacturing processes may not meet initial expectations and  
BioMarin may encounter problems with any of the following measurements of       
performance if it attempts to increase the scale or size or improve the         
commercial viability of its manufacturing processes:                            

.   design, construction and qualification of manufacturing facilities that 
meet regulatory requirements;                                       

.   schedule;                                                               

.   reproducibility;                                                        

.   production yields;                                                      

.   purity;                                                                 

.   costs;                                                                  

31  

DEFM14A
45th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 45th
.   quality control and assurance systems;                                  

.   shortages of qualified personnel; and                                   

.   compliance with regulatory requirements.                                

Improvements in manufacturing processes typically are very difficult to   
achieve and are often very expensive and may require extended periods of time   
to develop. If BioMarin contracts for manufacturing services with an unproven   
process, BioMarin's contractor is subject to the same uncertainties, high       
standards and regulatory controls.                                              

 The availability of suitable contract manufacturing at scheduled or optimum
times is not certain. The cost of contract manufacturing is greater than        
internal manufacturing and therefore BioMarin's manufacturing processes must be 
of higher productivity to yield equivalent margins.                             

The manufacture of Neutralase involves the fermentation of a bacterial    
species. BioMarin has never used a bacterial production process for the         
production of any commercial product. IBEX Technologies Inc., from which        
BioMarin acquired Neutralase, had contracted with a third party for the         
manufacture of the Neutralase used in prior clinical trials.                    

BioMarin has built-out approximately 51,800 square feet at its Novato     
facilities for manufacturing capability for Aldurazyme and Aryplase including   
related quality control laboratories, materials capabilities, and support       
areas. BioMarin expects to add additional capabilities in stages over time,     
which could create additional operational complexity and challenges. BioMarin   
expects that the manufacturing process of all of its new drug products,         
including Aryplase and Neutralase, will require significant time and resources  
before BioMarin can begin to manufacture them (or have them manufactured by     
third parties) in commercial quantity at acceptable cost.                       

In order to achieve BioMarin's product cost targets, it must develop      
efficient manufacturing processes either by:                                    

.   improving the product yield from BioMarin's current cell lines, colonies
of cells which have a common genetic makeup;                        

.   improving the manufacturing processes licensed from others; or          

.   developing more efficient, lower cost recombinant cell lines and        
production processes.                                               

A recombinant cell line is a cell line with foreign DNA inserted that is  
used to produce an enzyme or other protein that it would not have otherwise     
produced. The development of a stable, high production cell line for any given  
enzyme is difficult, expensive and unpredictable and may not result in adequate 
yields. In addition, the development of protein purification processes is       
difficult and may not produce the high purity required with acceptable yield    
and costs or may not result in adequate shelf-lives of the final products. If   
BioMarin is not able to develop efficient manufacturing processes, the          
investment in manufacturing capacity sufficient to satisfy market demand will   
be much greater and will place heavy financial demands upon BioMarin. If        
BioMarin does not achieve its manufacturing cost targets, it will have lower    
margins and reduced profitability in commercial production and larger losses in 
manufacturing start-up phases.                                                  

If BioMarin is unable to expand marketing and distribution capabilities or
to enter into agreements with third parties to do so, BioMarin's ability to     
generate revenues will be diminished.                                           

If BioMarin cannot expand capabilities either by developing its sales and 
marketing organization or by entering into agreements with others, BioMarin may 
be unable to successfully sell its products. BioMarin believes that developing  
an internal sales and distribution capability will be expensive and time        
consuming.                                                                      

32  

DEFM14A
46th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 46th
Alternatively, BioMarin may enter into agreements with third parties to market  
its products. For example, under BioMarin's joint venture with Genzyme, Genzyme 
is responsible for marketing and distributing Aldurazyme. However, these third  
parties may not be capable of successfully selling any of BioMarin's drug       
products.                                                                       

With BioMarin's acquisition of Neutralase from IBEX Technologies Inc.,    
BioMarin has an enzyme product that has a significantly larger potential        
patient population than Aldurazyme and Aryplase and will be marketed and sold   
to different target audiences with different therapeutic and financial          
requirements and needs. As a result, BioMarin will be competing with other      
pharmaceutical companies with experienced and well-funded sales and marketing   
operations targeting these specific physician and institutional audiences.      
BioMarin may not be able to develop its own sales and marketing force at all,   
or of a size that would allow it to compete with these other companies. If      
BioMarin elects to enter into third-party marketing and distribution agreements 
in order to sell into these markets, BioMarin may not be able to enter into     
these agreements on acceptable terms, if at all. If BioMarin cannot compete     
effectively in these specific physician and institutional markets, it would     
adversely affect sales of Neutralase.                                           

 If BioMarin fails to compete successfully with respect to product sales, it
may be unable to generate sufficient sales to recover its expenses related to   
the development of a product program or to justify continued marketing of a     
product.                                                                        

  BioMarin's competitors may develop, manufacture and market products that are
more effective or less expensive than BioMarin's. They may also obtain          
regulatory approvals for their products faster than BioMarin can obtain them    
(including those products with orphan drug designation) or commercialize their  
products before BioMarin does. With respect to Aldurazyme and Aryplase, if      
BioMarin's competitors successfully commercialize a product that treats MPS I   
or MPS VI, respectively, before BioMarin does, BioMarin may effectively be      
precluded from developing a product to treat that disease because the patient   
populations of the diseases are so small. If one of BioMarin's competitors gets 
orphan drug exclusivity, BioMarin could be precluded from marketing its version 
for seven years in the U.S. and ten years in the European Union. However,       
different drugs can be approved for the same condition. If BioMarin does not    
compete successfully, it may be unable to generate sufficient sales to recover  
its expenses related to the development of a product program or to justify      
continued marketing of a product.                                               

If BioMarin fails to compete successfully with respect to acquisitions,   
joint venture and other collaboration opportunities, it may be limited in its   
ability to develop new products and to continue to expand its product pipeline. 

BioMarin's competitors compete with it to attract organizations for       
acquisitions, joint ventures, licensing arrangements or other collaborations.   
To date, several of BioMarin's product programs have been acquired through      
acquisitions, such as the programs acquired from IBEX and Synapse, and several  
of its product programs have been developed through licensing or collaborative  
arrangements, such as Aldurazyme and Vibrilase. These collaborations include    
licensing proprietary technology from, and other relationships with, academic   
research institutions. If BioMarin's competitors successfully enter into        
partnering arrangements or license agreements with academic research            
institutions, BioMarin will then be precluded from pursuing those specific      
opportunities. Since each of these opportunities is unique, BioMarin may not be 
able to find a substitute. Several pharmaceutical and biotechnology companies   
have already established themselves in the field of enzyme therapeutics,        
including Genzyme, BioMarin's joint venture partner. These companies have       
already begun many drug development programs, some of which may target diseases 
that BioMarin is also targeting, and have already entered into partnering and   
licensing arrangements with academic research institutions, reducing the pool   
of available opportunities.                                                     

Universities and public and private research institutions are also        
competitors with BioMarin. While these organizations primarily have educational 
or basic research objectives, they may develop proprietary technology and       
acquire patents that BioMarin may need for the development of its drug          
products. BioMarin will attempt to                                              

33  

DEFM14A
47th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 47th
license this proprietary technology, if available. These licenses may not be    
available to BioMarin on acceptable terms, if at all. If BioMarin is unable to  
compete successfully with respect to acquisitions, joint venture and other      
collaboration opportunities, it may be limited in its ability to develop new    
products and to continue to expand its product pipeline.                        

If BioMarin does not achieve its projected development goals in the time  
frames it announces and expects, the commercialization of its products may be   
delayed and the credibility of its management may be adversely affected and, as 
a result, BioMarin's stock price may decline.                                   

For planning purposes, BioMarin estimates the timing of the accomplishment
of various scientific, clinical, regulatory and other product development       
goals, which it sometimes refers to as milestones. These milestones may include 
the commencement or completion of scientific studies and clinical trials and    
the submission of regulatory filings. From time to time, BioMarin publicly      
announces the expected timing of some of these milestones. All of these         
milestones are based on a variety of assumptions. The actual timing of these    
milestones can vary dramatically compared to BioMarin's estimates, in many      
cases for reasons beyond its control. If BioMarin does not meet these           
milestones as publicly announced, the commercialization of its products may be  
delayed and the credibility of its management may be adversely affected and, as 
a result, BioMarin's stock price may decline.                                   

If BioMarin fails to manage its growth or fails to recruit and retain     
personnel, its product development programs may be delayed.                     

 BioMarin's rapid growth has strained its managerial, operational, financial
and other resources. BioMarin expects this growth to continue. BioMarin has     
entered into a joint venture with Genzyme. If BioMarin receives FDA and/or      
foreign government approval to market Aldurazyme, the joint venture will be     
required to devote additional resources to support the commercialization of     
Aldurazyme.                                                                     

To manage expansion effectively, BioMarin needs to continue to develop and
improve its research and development capabilities, manufacturing and quality    
capacities, sales and marketing capabilities and financial and administrative   
systems. BioMarin's staff, financial resources, systems, procedures or controls 
may be inadequate to support its operations and its management may be unable to 
manage successfully future market opportunities or its relationships with       
customers and other third parties.                                              

BioMarin's future growth and success depends on its ability to recruit,   
retain, manage and motivate its employees. The loss of key scientific,          
technical and managerial personnel may delay or otherwise harm BioMarin's       
product development programs. Any harm to BioMarin's research and development   
programs would harm its business and prospects.                                 

Because of the specialized scientific and managerial nature of BioMarin's 
business, it relies heavily on its ability to attract and retain qualified      
scientific, technical and managerial personnel. In particular, the loss of      
Fredric D. Price, BioMarin's Chairman and Chief Executive Officer, or Emil D.   
Kakkis, M.D., Ph.D., BioMarin's Senior Vice President of Scientific Affairs or  
Christopher M. Starr, Ph.D., BioMarin's Senior Vice President for Research and  
Development, could be detrimental to BioMarin if it cannot recruit suitable     
replacements in a timely manner. While Mr. Price, Dr. Kakkis and Dr. Starr are  
parties to employment agreements with BioMarin, these agreements do not         
guarantee that they will remain employed with BioMarin in the future. In        
addition, these agreements do not restrict their ability to compete with        
BioMarin after their employment is terminated. The competition for qualified    
personnel in the biopharmaceutical field is intense. Due to this intense        
competition, BioMarin may be unable to continue to attract and retain qualified 
personnel necessary for the development of its business.                        

34  

DEFM14A
48th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 48th
Changes in methods of treatment of disease could reduce demand for        
BioMarin's products.                                                            

Even if BioMarin's drug products are approved, doctors must use treatments
that require using those products. If doctors elect a different course of       
treatment from that which includes BioMarin's drug products, this decision      
would reduce demand for BioMarin's drug products.                               

Examples include the potential use in the future of effective gene therapy
for the treatment of genetic diseases. The use of gene therapy could            
theoretically reduce or eliminate the use of enzyme replacement therapy in MPS  
diseases. Sometimes, this change in treatment method can be caused by the       
introduction of other companies' products or the development of new             
technologies or surgical procedures which may not directly compete with ours,   
but which have the effect of changing how doctors decide to treat a disease.    
For example, Neutralase is being developed for heparin reversal in coronary     
artery bypass graft (CABG) surgery. It is possible that alternative             
non-surgical methods of treating heart disease could be developed. If so, then  
the demand for Neutralase would likely decrease.                                

 If product liability lawsuits are successfully brought against BioMarin, it
may incur substantial liabilities.                                              

  BioMarin is exposed to the potential product liability risks inherent in the
testing, manufacturing and marketing of human pharmaceuticals. The              
BioMarin/Genzyme LLC maintains product liability insurance for BioMarin's       
clinical trials of Aldurazyme with aggregate loss limits of $5.0 million.       
BioMarin has obtained insurance against product liability lawsuits for the      
clinical trials for Aryplase and Vibrilase with aggregate loss limits of $8.0   
million. Pharmaceutical companies must balance the cost of insurance with the   
level of coverage based on estimates of potential liability. Historically, the  
potential liability associated with product liability lawsuits for              
pharmaceutical products has been unpredictable. Although BioMarin believes that 
its current insurance is a reasonable estimate of its potential liability and   
represents a commercially reasonable balancing of the level of coverage as      
compared to the cost of the insurance, BioMarin may be subject to claims in     
connection with its current clinical trials for Aldurazyme, Aryplase and        
Vibrilase for which the joint venture's or BioMarin's insurance coverages are   
not adequate.                                                                   

If Aldurazyme, Aryplase or Vibrilase receives FDA approval, the product   
liability insurance the joint venture or BioMarin will need to obtain in        
connection with the commercial sales of Aldurazyme, Aryplase or Vibrilase may   
be unavailable in meaningful amounts or at a reasonable cost. In addition,      
while BioMarin takes, and continues to take, what it believes are appropriate   
precautions, it may be unable to avoid significant liability if any product     
liability lawsuit is brought against it. If BioMarin is the subject of a        
successful product liability claim that exceeds the limits of any insurance     
coverage BioMarin may obtain, it may incur substantial liabilities that would   
adversely affect BioMarin's earnings and require the commitment of capital      
resources that might otherwise be available for the development and             
commercialization of BioMarin's product programs.                               

BioMarin's stock price may be volatile, and an investment in BioMarin's   
stock could suffer a decline in value.                                          

BioMarin's valuation and stock price since the beginning of trading after 
its initial public offering has had no meaningful relationship to current or    
historical earnings, asset values, book value or many other criteria based on   
conventional measures of stock value. The market price of BioMarin's common     
stock will fluctuate due to factors including:                                  

.   progress of Aldurazyme, Neutralase, Aryplase and BioMarin's other lead  
drug products through the regulatory process, especially regulatory 
actions in the United States related to Aldurazyme;                 

 .   results of clinical trials, announcements of technological innovations or
new products by BioMarin or BioMarin's competitors;                 

35  

DEFM14A
49th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 49th
.   government regulatory action affecting BioMarin's drug products or its  
competitors' drug products in both the United States and foreign    
countries;                                                          

.   developments or disputes concerning patent or proprietary rights;       

.   general market conditions and fluctuations for the emerging growth and  
biopharmaceutical market sectors;                                   

.   economic conditions in the United States or abroad;                     

.   actual or anticipated fluctuations in BioMarin's operating results;     

.   broad market fluctuations in the United States or in Europe, which may  
cause the market price of BioMarin's common stock to fluctuate; and 

.   changes in company assessments or financial estimates by securities     
analysts.                                                           

In addition, the value of BioMarin's common stock may fluctuate because it
is listed on both Nasdaq and the Swiss Exchange's SWX New Market. Listing on    
both exchanges may increase stock price volatility due to:                      

.   trading in different time zones;                                        

.   different ability to buy or sell BioMarin's stock;                      

.   different market conditions in different capital markets; and           

.   different trading volume.                                               

 In the past, following periods of large price declines in the public market
price of a company's securities, securities class action litigation has often   
been initiated against that company. Litigation of this type could result in    
substantial costs and diversion of management's attention and resources, which  
would hurt BioMarin's business. Any adverse determination in litigation could   
also subject BioMarin to significant liabilities.                               

  If BioMarin's officers and directors elect to act together, they may be able
to control BioMarin's management and operations, acting in their best interests 
and not necessarily those of other stockholders.                                

BioMarin's directors and officers (and their respective affiliates, not   
including Glyko) control approximately 3.0% of the outstanding shares of        
BioMarin's common stock and Glyko owns approximately 21.3% of the outstanding   
shares of BioMarin's capital stock, based on the number of issued and           
outstanding shares of BioMarin common stock as of June 27, 2002. The President  
and Chief Executive Officer of Glyko and a significant shareholder of Glyko     
serve as two of BioMarin's directors. As a result, due to their concentration   
of stock ownership, directors and officers, if they act together, may be able   
to control BioMarin's management and operations, and may be able to prevail on  
all matters requiring a stockholder vote including:                             

.   The election of all directors;                                          

.   The amendment of charter documents or the approval of a merger, sale of 
assets or other major corporate transactions; and                   

.   The defeat of any non-negotiated takeover attempt that might otherwise  
benefit the public stockholders.                                    

Assuming completion of the proposed transaction as described in this Joint
Proxy Circular, BioMarin's directors and officers would control approximately   
4.9% of the outstanding shares of BioMarin's common stock.                      

 Anti-takeover provisions in BioMarin's charter documents and under Delaware
law may make an acquisition of BioMarin, which may be beneficial to BioMarin's  
stockholders, more difficult.                                                   

BioMarin is incorporated in Delaware. Certain anti-takeover provisions of 
Delaware law and BioMarin's charter documents as currently in effect may make a 
change in control of BioMarin more difficult, even if a                         

36  

DEFM14A
50th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 50th
change in control would be beneficial to the stockholders. BioMarin's           
anti-takeover provisions include provisions in the certificate of incorporation 
providing that stockholders' meetings may only be called by the board of        
directors and a provision in the bylaws providing that the stockholders may not 
take action by written consent. Additionally, BioMarin's board of directors has 
the authority to issue 1,000,000 shares of preferred stock and to determine the 
terms of those shares of stock without any further action by the stockholders.  
The rights of holders of BioMarin's common stock are subject to the rights of   
the holders of any preferred stock that may be issued. The issuance of          
preferred stock could make it more difficult for a third party to acquire a     
majority of BioMarin's outstanding voting stock. Delaware law also prohibits    
corporations from engaging in a business combination with any holders of 15% or 
more of their capital stock until the holder has held the stock for three years 
unless, among other possibilities, the board of directors approves the          
transaction. BioMarin's board of directors may use these provisions to prevent  
changes in the management and control of BioMarin. Also, under applicable       
Delaware law, BioMarin's board of directors may adopt additional anti-takeover  
measures in the future.                                                         

Risk Relating to Glyko -- For Consideration by BioMarin Stockholders            

  By voting in favor of the transaction, BioMarin stockholders are authorizing
the acquisition of Glyko. Glyko's principal asset is its ownership in BioMarin. 
BioMarin stockholders should carefully review the risk relating to Glyko in     
deciding whether or not to vote their shares of BioMarin common stock in favor  
of the transaction.                                                             

 Glyko has a history of losses largely due to its investment in BioMarin and
there is no significant guarantee of future profitability.                      

  Glyko has a history of losses largely due to its investment in BioMarin, and
Glyko expects to continue to incur losses due to its share of BioMarin's net    
loss resulting from the ongoing research and development of BioMarin's          
pharmaceutical product candidates until the completion of the transaction.      
Glyko's only significant asset is its 21.3% ownership of BioMarin's outstanding 
capital stock, based on the number of issued and outstanding shares of BioMarin 
common stock as of June 27, 2002. As a result of Glyko's sale of Glyko, Inc. on 
October 7, 1998, it has no operating activities or operational employees. In    
light of the fact that Glyko does not conduct an operating business, Glyko does 
not expect to have income to offset its losses.                                 

Risk Regarding Arthur Andersen LLP--For Consideration by BioMarin Stockholders  
and Glyko Shareholders                                                          

The ability of BioMarin stockholders and Glyko shareholders to recover    
against Arthur Andersen LLP, may be limited because neither BioMarin nor Glyko  
have been able to obtain, after reasonable efforts, the reissued reports of     
Arthur Andersen with respect to the financial statements included in this Joint 
Proxy Circular.                                                                 

  The BioMarin consolidated financial statements, the IBEX Therapeutic Enzymes
Division financial statements, and the Glyko financial statements included in   
Annexes I, J, K and L to this Joint Proxy Circular have been audited by Arthur  
Andersen LLP. Neither BioMarin nor Glyko have been able to obtain, after        
reasonable efforts, the reissued reports of Arthur Andersen with respect to the 
financial statements included in this Joint Proxy Circular because, among other 
reasons, the partner and the audit manager in charge of auditing BioMarin and   
Glyko left Arthur Andersen and joined KPMG LLP effective May 9, 2002 and June   
11, 2002, respectively. Therefore, in reliance on Rule 437a promulgated under   
the Securities Act, BioMarin and Glyko have dispensed with the requirement to   
file with this Joint Proxy Circular, the reissued reports of Arthur Andersen    
with respect to these financial statements. As a result, the BioMarin           
stockholders and the Glyko shareholders will not be able to recover against     
Arthur Andersen under Section 11 of the Securities Act for any untrue statement 
of a material fact contained in these financial statements or any omissions to  
state a material fact required to be stated therein. In addition, the ability   
of Arthur Andersen to satisfy any claims properly brought against it may be     
limited as a practical matter due to recent developments involving Arthur       
Andersen.                                                                       

37  

DEFM14A
51st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 51st
THE ANNUAL MEETING OF BIOMARIN STOCKHOLDERS 

General                                                                         

The accompanying BioMarin proxy is being furnished in connection with the 
solicitation of proxies on behalf of the BioMarin board of directors for use at 
the annual meeting of the stockholders of BioMarin. Only holders of record of   
BioMarin common stock at the close of business on June 27, 2002 will be         
entitled to vote at the BioMarin annual meeting. At the close of business on    
the BioMarin record date, there were 53,424,129 shares of BioMarin common stock 
outstanding and entitled to vote. The shares of BioMarin common stock vote      
together as a single class, and each share entitles the holder to one vote on   
all matters presented at the BioMarin annual meeting. A majority of the shares  
of BioMarin common stock, present in person or by proxy, will constitute a      
quorum for the transaction of business. BioMarin's Annual Report, including its 
Form 10-K for the fiscal year ended December 31, 2001 as filed with the U.S.    
Securities and Exchange Commission, is enclosed with this Joint Proxy Circular. 

Date, Time and Place                                                            

The annual meeting of stockholders of BioMarin will be held on August 13, 
2002 at 10:00 a.m., California time, at Embassy Suites Hotel, 101 McInnis       
Parkway, San Rafael, California 94903.                                          

Purpose of the Annual Meeting                                                   

 At the annual meeting, or any adjournment or postponement thereof, BioMarin
stockholders will be asked to consider and vote upon the following proposals:   

1. to elect six directors of BioMarin;                                  

2. to approve the transaction with Glyko, including, without limitation,
    the issuance of shares of BioMarin common stock in connection with the
transaction; and                                                  

3. to transact such other business as properly may be brought before the
      annual meeting or any adjournment or postponement of the annual meeting.

Additional information regarding the above proposals is included under the
section entitled "Additional Information on Proposals for the Annual Meeting"   
described below. The Acquisition Agreement and the Plan of Arrangement are      
attached to this Joint Proxy Circular as Annex A and Annex B, respectively.     
BioMarin stockholders are encouraged to read the additional information and the 
Acquisition Agreement and related exhibits in their entirety and the other      
information contained in this Joint Proxy Circular, including the annexes,      
carefully before deciding how to vote with respect to the above proposals.      

Record Date for the Annual Meeting                                              

BioMarin's board of directors has fixed the close of business on June 27, 
2002 as the record date for determination of BioMarin stockholders entitled to  
notice of and to vote at the annual meeting.                                    

Vote Required                                                                   

  Except in certain specific circumstances, the affirmative vote of a majority
of shares present in person or represented by proxy at a duly held annual       
meeting at which a quorum is present is required under Delaware law for         
approval of proposals presented to stockholders. An exception to this procedure 
relates to the election of directors. The six nominees receiving the highest    
number of votes "FOR" a director will be elected as directors. This number is   
called a plurality.                                                             

38  

DEFM14A
52nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 52nd
  The transaction including, without limitation, the issuance of the shares of
BioMarin common stock in connection with the transaction, must be approved by   
the affirmative vote of a majority of the outstanding BioMarin common stock,    
present or represented by proxy at the BioMarin annual meeting. Such            
stockholder approval is required under the rules of Nasdaq. Under the rules of  
Nasdaq, shareholder approval is required because BioMarin will issue shares of  
its common stock representing, in the aggregate, in excess of 20% of its        
outstanding common stock prior to such issuance and one of BioMarin's           
directors, Mr. Gywnn Williams, will receive approximately 8.3% of the shares of 
BioMarin common stock to be issued in this transaction. If BioMarin were to     
consummate the transaction without stockholder approval, BioMarin common stock  
could be subject to delisting by Nasdaq. It is a condition to the obligation of 
BioMarin to close the transaction that the approval of its stockholders to the  
transaction as described herein be obtained.                                    

Quorum                                                                          

BioMarin's bylaws provide that a majority of all issued and outstanding   
voting shares of BioMarin as of the record date, represented in person or by    
proxy, constitutes a quorum for the transaction of business at the annual       
meeting. If a quorum is not present, in person or by proxy, then either the     
chairman of the annual meeting or stockholders entitled to vote at the annual   
meeting, present in person or represented by proxy, will have the power to      
adjourn the annual meeting from time to time, without notice other than an      
announcement at the annual meeting, until a quorum is present. At any adjourned 
annual meeting at which a quorum is present, any business may be transacted     
that might have been transacted as originally notified. If the adjournment is   
for more than thirty days, or if after that adjournment a new record date is    
fixed for the adjourned annual meeting, a notice of the adjourned annual        
meeting shall be given to each stockholder of record entitled to vote at the    
adjourned annual meeting.                                                       

Voting of Proxies at Annual Meeting and Revocability of Proxies                 

  All shares represented by valid proxies received prior to the annual meeting
will be voted and, where a stockholder specifies by means of the proxy a choice 
with respect to any matter to be acted upon, the shares will be voted in        
accordance with the specification so made.                                      

 Votes cast by proxy or in person at the annual meeting will be tabulated by
the Inspector of Elections (the "Inspector") who will be an employee of         
BioMarin's transfer agent. The Inspector will also determine whether or not a   
quorum is present. The Inspector will treat shares that are voted "AGAINST" or  
"ABSTAIN" as being present and entitled to vote for purposes of determining the 
presence of a quorum but such shares will not be treated as votes in favor of   
approving any matter submitted to the stockholders for a vote. When proxies are 
properly dated, executed and returned, the shares represented by such proxies   
will be voted at the annual meeting in accordance with the instructions of the  
stockholder. If no specific instructions are given, the shares will be voted    
(i) for the election of the nominees for directors set forth herein; (ii) for   
the transaction including, without limitation, the issuance of the shares of    
BioMarin common stock to be issued in connection with the transaction; and      
(iii) at the discretion of the proxyholder, upon such other business as may     
properly come before the annual meeting or any adjournment or postponement      
thereof. Proxyholders who have been granted discretionary authority will have   
discretionary authority to vote only on those matters that BioMarin, at a       
reasonable time before solicitation of proxies began, was not aware would be    
presented for action at the meeting. As of the date of mailing this Joint Proxy 
Circular, other than the matters related to Proposals 1 and 2, BioMarin was not 
aware of any other matters that would be presented for action at its annual     
meeting.                                                                        

If a broker indicates on the enclosed proxy or its substitute that such   
broker does not have discretionary authority as to certain shares to vote on a  
particular matter, those shares will not be considered as present with respect  
to that matter. BioMarin believes that the tabulation procedures to be followed 
by the Inspector are consistent with the general statutory requirements under   
Delaware law concerning voting of shares and determination of a quorum.         

39  

DEFM14A
53rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 53rd
A stockholder who has given a proxy may revoke it at any time before it is
exercised at the BioMarin annual meeting, by (1) delivering to the secretary of 
BioMarin (by any means, including facsimile) a written notice stating that the  
proxy is revoked, (2) signing and so delivering a proxy bearing a later date or 
(3) attending the BioMarin annual meeting and voting in person (although        
attendance at the BioMarin annual meeting will not, by itself, revoke a proxy). 

Solicitation of Proxies and Expenses                                            

BioMarin is soliciting proxies for the BioMarin annual meeting from       
BioMarin's stockholders and Glyko is soliciting proxies for the Glyko special   
meeting from its shareholders. BioMarin will bear costs incurred by BioMarin    
related to the solicitation of proxies of its stockholders, including expenses  
in connection with preparing and mailing this Joint Proxy Circular to its       
stockholders. In addition, upon request BioMarin will reimburse brokerage firms 
and other persons representing beneficial owners of shares of BioMarin common   
stock for their reasonable out-of-pocket expenses in forwarding solicitation    
material to such beneficial owners. Proxies may also be solicited by certain of 
BioMarin's directors, officers and regular employees, without additional        
compensation, in person or by telephone, or facsimile, or e-mail or telegram.   

  BioMarin has retained Morrow & Co., Inc. to assist it in the solicitation of
proxies. BioMarin has agreed to pay customary fees to Morrow & Co. for its      
services in soliciting proxies for BioMarin's annual meeting and has agreed to  
reimburse Morrow & Co. for reasonable out-of-pocket expenses for these services.

Dissenters' or Appraisal Rights                                                 

  Under the Delaware General Corporation Law, holders of BioMarin common stock
will not be entitled to demand appraisal of, or to receive payment for, their   
shares of BioMarin common stock.                                                

Submission of Stockholder Proposals for 2003 Annual Meeting                     

Stockholders, who intend to submit a proposal for inclusion in BioMarin's 
proxy materials for the 2003 annual meeting of stockholders of BioMarin, must   
submit the proposal to BioMarin no later than January 17, 2003. Stockholders    
who intend to present a proposal at the 2003 annual meeting of stockholders     
without inclusion of such proposal in BioMarin's proxy materials for the 2003   
annual meeting are required to provide notice of such proposal to BioMarin no   
later than March 14, 2003. BioMarin reserves the right to reject, rule out of   
order, or take other appropriate action with respect to any proposal that does  
not comply with these and other applicable requirements.                        

Auditors                                                                        

Arthur Andersen LLP, certified public accountants, were the independent   
auditors of BioMarin from BioMarin's inception on March 21, 1997 until June 11, 
2002. During that time, Arthur Andersen LLP audited BioMarin's financial        
statements annually.                                                            

  Effective as of June 11, 2002, BioMarin dismissed Arthur Andersen LLP as its
independent accountants. BioMarin's Audit Committee recommended the dismissal   
of Arthur Andersen LLP and the entire board of directors of BioMarin            
participated in and approved such dismissal. Effective as of the same date,     
BioMarin engaged KPMG LLP as its new independent accountants. BioMarin's audit  
committee recommended this action which was approved unanimously by its board   
of directors.                                                                   

The reports of Arthur Andersen LLP on BioMarin's financial statements for 
the past two fiscal years contained no adverse opinion or disclaimer of opinion 
and were not qualified or modified as to uncertainty, audit scope or accounting 
principle. In connection with BioMarin's audits for the two most recent fiscal  
years and through June 11, 2002, there were no disagreements with Arthur        
Andersen LLP on any matter of accounting                                        

40  

DEFM14A
54th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 54th
principles or practices, financial statement disclosure, or auditing scope or   
procedure, which disagreements if not resolved to the satisfaction of Arthur    
Andersen LLP would have caused them to make reference thereto in their report   
on the financial statements for such years. During the two most recent fiscal   
years and through June 11, 2002, there have been no reportable events (as       
defined in Item 304(a)(1)(v) of Regulation S-K under the Securities Act).       

 During the two most recent fiscal years and through June 11, 2002, BioMarin
has not consulted with KPMG LLP regarding either:                               

.   the application of accounting principles to a specified transaction,    
    either completed or proposed; or the type of audit opinion that might be
    rendered on BioMarin's financial statements, and either a written report
was provided to BioMarin or oral advice was provided that KPMG LLP  
  concluded was an important factor considered by BioMarin in reaching a
    decision as to the accounting, auditing or financial reporting issue; or

 .   any matter that was either the subject of a disagreement, as that term is
    defined in Item 304(a)(1)(iv) of Regulation S-K under the Securities Act
and the related instructions to Item 304 of Regulation S-K under the
  Securities Act, or a reportable event, as that term is defined in Item
304(a)(1)(v) of Regulation S-K under the Securities Act.            

Representatives of KPMG LLP plan to attend the BioMarin annual meeting and
will be available to answer questions and, although they do not expect to do    
so, they will have the opportunity to make a statement if they so desire. It is 
not expected that a representative of Arthur Andersen LLP will be present at    
the annual meeting. However, KPMG LLP has advised BioMarin that its             
representatives will be familiar with and able to answer questions regarding    
BioMarin's financial statements for the most recently completed fiscal year.    

For the year ended December 31, 2001, Arthur Andersen LLP billed BioMarin 
the following amounts for the respective professional services:                 

                                                                [Download Table]
                                                                               
Audit Fees............................................................ $150,000
Financial Information Systems Design and Implementation Fees.......... $      0
All Other Fees........................................................ $198,854

The Audit Committee has considered the nature and amount of these fees and
believes that the provision of the services relating to Financial Information   
Systems and All Other Fees is compatible with maintaining Arthur Andersen LLP's 
independence.                                                                   

Other Matters                                                                   

  BioMarin is not aware of any other matters to come before the annual meeting
of the stockholders of BioMarin other than as set forth in the Notice of Annual 
Meeting of Stockholders. If any other matter properly comes before the meeting, 
it is the intention of the persons named in the enclosed proxy form to vote the 
shares represented thereby in accordance with their best judgment on such       
matter.                                                                         

Additional Information on Proposals for the Annual Meeting                      

Proposal One: Election of Directors                                       

  BioMarin has a board of directors currently consisting of six directors. Six
members of BioMarin's board of directors will be elected at the annual meeting. 
The proxy holders may not vote the proxies for a greater number of persons than 
the number of nominees named. Unless otherwise instructed, the proxy holders    
will vote the proxies received by them for the six nominees named below, all of 
whom are presently directors of BioMarin. If any nominee is unable or declines  
to serve as a director at the time of the annual meeting, the proxies will be   

41  

DEFM14A
55th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 55th
voted for any nominees who shall be designated by the present board of          
directors to fill the vacancy. It is not expected that any nominee will be      
unable to or will decline to serve as a director. If BioMarin stockholders      
nominate additional persons for election as directors, the proxy holder will    
vote all proxies received by him to assure the election of as many of the board 
of directors' nominees as possible with the proxy holder making any required    
selection of specific nominees to be voted for. The term of office of each      
person elected as a director shall continue until the next annual meeting of    
BioMarin stockholders or until that person's successor has been elected. If a   
quorum is present, the six nominees receiving the highest number of affirmative 
votes of the votes cast shall be elected as directors.                          

Nominees For Director                                                       

Set forth below is certain information regarding the nominees to the board
of directors of BioMarin:                                                       

                                                        [Enlarge/Download Table]

                 Name                    Age        Position with BioMarin        Director Since
                 ----                    ---        ----------------------        --------------
                                                                                                
Fredric D. Price........................ 56  Chief Executive Officer and Chairman  October 2000 
                                               of the Board                                     
Franz L. Cristiani(2)................... 61  Director                               June 2002   
Phyllis I. Gardner, M.D.(1)(2).......... 51  Director                             September 2001
Erich Sager(1)(2)....................... 43  Director                             November 1997 
Vijay B. Samant......................... 49  Director                               June 2002   
Gwynn R. Williams(1)(2)................. 67  Director                              October 1996 

--------                                                                        
(1) Member of BioMarin's Compensation Committee.                                
(2) Member of BioMarin's Audit Committee.                                       

  Each nominee to the BioMarin board of directors has consented to being named
in the Joint Proxy Circular and to serve as a director if elected. There is no  
family relationship between any director and any executive officer of BioMarin. 

Fredric D. Price was elected Chairman of the Board and Chief Executive    
Officer of BioMarin on October 31, 2000. From September 1994 to September 2000, 
he was President, Chief Executive Officer, and a member of the Board of         
Directors of Applied Microbiology/AMBI, a biotechnology and nutrition company.  
From July 1991 to September 1994, he was Vice President Finance &               
Administration and Chief Financial Officer of Regeneron Pharmaceuticals. From   
March 1986 to July 1991, he was a pharmaceuticals and biotechnology industry    
strategy consultant. For the 13 previous years, he was employed by Pfizer       
Pharmaceuticals where he was a Vice President with both staff and line          
responsibilities. Mr. Price received a B.A. in 1967 from Dartmouth College and  
an M.B.A. in 1969 from the Wharton School of the University of Pennsylvania. He 
is a member of the advisory board of equity4life, a health care investment      
company based in Zurich, Switzerland, and a member of the board of directors of 
LifeSpan BioSciences, Inc., a biotechnology company based in Seattle,           
Washington.                                                                     

 Franz L. Cristiani was appointed to the BioMarin board of directors in June
2002 and serves as chairman of its audit committee. Mr. Cristiani provided      
consulting services to BioMarin from January 2002 to May 2002. From February    
1964 to August 1999, he was with Arthur Andersen LLP, as Partner since 1976,    
with clients in high-technology, life-sciences, manufacturing, mining, forest   
products, distribution, publishing and food products industries. At Arthur      
Andersen, he specialized in public companies and had extensive hands-on         
experience with public filings and financings. He holds a B.A. from San         
Francisco State University and is a Certified Public Accountant.                

Phyllis I. Gardner, M.D. has served as a director of BioMarin since       
September 2001. She is an Associate Professor (with tenure) of Medicine and     
Pharmacology, Stanford University School of Medicine, where she has been since  
1984. Dr. Gardner served as Vice President of Research and Principal Scientist  
of ALZA Corporation, a pharmaceutical company, from 1996 to 1998, having served 
as Principal Scientist and Consultant, ALZA                                     

42  

DEFM14A
56th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 56th
Technology Institute of ALZA Corporation from 1994 to 1996 (while on leave from 
Stanford). She is a co-founder of Genomics Collaborative, Inc., as well as a    
co-founder and director of CambriaTech Investment Fund and Xeragen, Inc. She is 
currently serving as the interim Chief Executive Officer of Xeragen. She also   
serves on the board of directors of Aerogen Corporation and Health Hero Network 
Corporation and on the scientific advisory boards of Vical, Inc., iMEDD, Inc.   
and LifetecNet, Inc. Dr. Gardner received a B.S. from the University of         
Illinois in 1972 and an M.D. from the Harvard Medical School in 1976.           

 Erich Sager has served as a director of BioMarin since November 1997. Since
September 1996, Mr. Sager has served as the Chairman of LaMont Asset Management 
SA, a private investment management firm. From April 1994 to August 1996, Mr.   
Sager served as Senior Vice President, Head of Private Banking for Dresdner     
Bank (Switzerland) Ltd. From September 1991 to March 1994, Mr. Sager served as  
Vice President, Private Banking-Head German Desk for Deutsche Bank              
(Switzerland) Ltd. From 1981 to 1989, Mr. Sager held various positions at a     
number of banks in Switzerland. Mr. Sager serves as a director of Restoragen,   
Inc., Dentalview, Inc., Kimsa Holding, LaMont Asset Management, SA and Sermont  
Asset Management, SA. Mr. Sager received a Business Degree from the School of   
Economics and Business Administration in Zurich, Switzerland.                   

Vijay B. Samant was appointed to the BioMarin board of directors in June  
2002. He has served as the President and Chief Executive Officer of Vical       
Incorporated, a biopharmaceutical company, since November 2000. From 1998 to    
2000, he was the Chief Operating Officer of the Vaccine Division at Merck &     
Co., Inc. From 1990 to 1998, he served in the Manufacturing Division of Merck   
as Vice President of Vaccine Operations, Vice President of Business Affairs,    
and Executive Director of Materials Management. Mr. Samant earned his M.B.A.    
from the Sloan School of Management at the Massachusetts Institute of           
Technology in 1983. He received a master's degree in chemical engineering from  
Columbia University in 1977 and a bachelor's degree in chemical engineering     
from the University of Bombay, University Department of Chemical Technology,    
India, in 1975.                                                                 

Gwynn R. Williams has served as a director of BioMarin since its          
incorporation. Mr. Williams founded AstroMed Limited and Astroscan Limited, UK  
manufacturers of scientific equipment, in March 1984, which entities, in        
December 1997, merged into Life Science Resources Ltd. Previously, Mr. Williams 
was a partner of Arthur Andersen & Co., a mathematician with General Motors     
Research, and a mathematician with British Steel. Mr. Williams was a founder of 
Glyko Biomedical Ltd. and its predecessor Glyko, Inc. Mr. Williams received a   
B.S. in Theoretical Physics from the University of Wales.                       

Board Meetings and Board Committees                                       

The board of directors manages the business of BioMarin. It establishes   
overall policies and standards for BioMarin and reviews the performance of      
management. In addition, the board has established an Audit Committee, a        
Compensation Committee, and a Non-officer Option Committee whose functions are  
briefly described below. The board has not established a Nominating Committee.  

The board of directors of BioMarin held a total of 11 meetings during the 
year ended December 31, 2001 and took action by unanimous written consent on    
three occasions. No director participated in fewer than 75% of all such         
meetings and actions of the board of directors and the committees thereof held  
during fiscal 2001, if any, upon which such director served.                    

Audit Committee.  The Audit Committee provides oversight of the (i)       
financial reporting process, the system of internal controls and the audit      
process of BioMarin and (ii) BioMarin's independent auditors. The Audit         
Committee also recommends to the board of directors the appointment of          
BioMarin's independent certified public accountants. On June 15, 2000, the      
board adopted a new written Audit Committee Charter (the "Audit Charter"), a    
copy of which was included with BioMarin's proxy statement related to the 2001  
annual meeting of its stockholders. As also required by the Audit Charter, each 
of the members of the Audit Committee is an                                     

43  

DEFM14A
57th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 57th
independent director as defined by Nasdaq Rule 4200(a)(15). The members of the  
Audit Committee are Mr. Cristiani, Dr. Gardner, Mr. Sager, and Mr. Williams.    
During the fiscal year 2001, the Audit Committee met on 5 occasions.            

Compensation Committee.  The Compensation Committee, which consists of Dr.
Gardner, Mr. Sager and Mr. Williams, sets general compensation policy for       
BioMarin and has final approval power over compensation of executive officers.  
The Compensation Committee also has final approval power over guidelines and    
criteria for employees' bonuses and administers BioMarin's 1997 Stock Plan and  
1998 Director Option Plan. The Compensation Committee met once in 2001.         

Non-officer Option Committee.  The Non-officer Option Committee, which    
consists of Mr. Price, determines grants of stock options to non-officer        
employees of BioMarin pursuant to BioMarin's 1997 Stock Plan. The stock grants  
by the Non-officer Option Committee may be made only within the guidelines and  
parameters established by the Compensation Committee.                           

Section 16(a) Beneficial Ownership Reporting Compliance                   

 Section 16(a) of the United States Securities Exchange Act of 1934 requires
BioMarin's directors and officers and persons who own more that 10% of a        
registered class of BioMarin's equity securities to file reports of ownership   
and reports of changes in the ownership with the U.S. Securities and Exchange   
Commission and the National Association of Securities Dealers, Inc. Executive   
officers, directors, and greater than 10% stockholders are required by the U.S. 
Securities and Exchange Commission to furnish BioMarin with copies of all       
Section 16(a) forms they file.                                                  

  To the best of BioMarin's knowledge, based solely on review of the copies of
such reports furnished to BioMarin or written representations that no other     
reports were required, during the fiscal year ended December 31, 2001, all      
officers, directors, and 10% stockholders complied with all Section 16(a)       
filing requirements.                                                            

Compensation Committee Interlocks and Insider Participation               

 None of the members of the Compensation Committee is currently or has been,
at any time since the formation of BioMarin, an officer or employee of          
BioMarin. No member of the Compensation Committee serves as a member of the     
board of directors or compensation committee of any entity that has one or more 
executive officers serving as a member of BioMarin's board of directors or      
Compensation Committee.                                                         

The board of directors of BioMarin unanimously recommends voting FOR the  
election of each of the foregoing nominees to its board of directors.           

Proposal Two: Approval of the Transaction                                 

The disinterested members of BioMarin's board of directors, which         
constitutes a majority of BioMarin's board of directors, believe that the terms 
of the transaction are fair to the stockholders of BioMarin and in the best     
interests of BioMarin and have unanimously approved the transaction including,  
without limitation, the issuance of shares of BioMarin common stock in          
connection with the transaction.                                                

The disinterested members of BioMarin's board of directors, which         
constitutes a majority of the board of directors, recommend that the            
stockholders of BioMarin vote FOR the transaction including, without            
limitation, the issuance of shares of BioMarin common stock in connection with  
the transaction. In considering such recommendation, BioMarin stockholders      
should be aware that some BioMarin directors have interests in the transaction  
that are different from, or in addition to, those of BioMarin stockholders, and 
that BioMarin provides indemnification to directors and officers of BioMarin.   
See "The Transaction--Interests of Certain Persons in the Transaction."         

44  

DEFM14A
58th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 58th
The matters to be considered at the annual meeting are of great importance
to the stockholders of BioMarin. Accordingly, you are urged to read and         
carefully consider the information presented in this Joint Proxy Circular, and  
to complete, date, sign and promptly return the enclosed BioMarin proxy card in 
the enclosed postage paid envelope.                                             

Contact for Questions and Assistance in Voting                                  

Any BioMarin stockholder who has a question about the transaction, the    
issuance of shares in connection with the transaction, or how to vote or revoke 
a proxy, or who wishes to obtain additional copies of this Joint Proxy          
Circular, should contact BioMarin's proxy solicitor at the address or telephone 
number listed below:                                                            

Morrow & Co., Inc.  
445 Park Avenue--5th Floor  
New York, NY 10022  
1-800-607-0088  

If you need additional copies of this Joint Proxy Circular or voting      
materials, you should contact Morrow & Co. Inc. as described above.             

45  

DEFM14A
59th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 59th
THE SPECIAL MEETING OF GLYKO SHAREHOLDERS 

General                                                                         

Glyko is furnishing this Joint Proxy Circular to its shareholders in      
connection with the solicitation of proxies by management of Glyko for use at   
the Glyko special meeting to be held on August 15, 2002.                        

Date, Time and Place                                                            

  The special meeting of shareholders of Glyko will be held on August 15, 2002
at 10:00 a.m., Toronto time, at the offices of Blake, Cassels & Graydon LLP,    
199 Bay Street, Suite 2300, Commerce Court West, Toronto, Ontario M5L 1A9.      

Purpose of the Special Meeting                                                  

At the Glyko special meeting, Glyko shareholders will be asked:           

1. to consider, pursuant to an order of the Superior Court of Justice   
      (Ontario) dated July 2, 2002, and, if deemed advisable, to pass, with or
     without variation, the Glyko arrangement resolution attached as Annex C
   to this Joint Proxy Circular to approve the arrangement under Section
192 of the Canada Business Corporations Act involving the indirect
     acquisition by BioMarin of all the issued and outstanding common shares
of Glyko;                                                         

 2. if the special resolution approving the above mentioned arrangement is
      approved, to consider, and if deemed advisable, to pass, with or without
     variation, the Glyko continuance resolution attached as Annex D to this
     Joint Proxy Circular to approve the continuance of Glyko under the laws
of British Columbia; and                                          

 3. to transact such further or other business as may properly come before
   the Glyko special meeting or any adjournment or postponement thereof.

Glyko will not proceed with the transaction unless both the arrangement   
resolution and the continuance resolution are approved by shareholders.         

  A copy of the Acquisition Agreement and the Plan of Arrangement are attached
to this Joint Proxy Circular as Annex A and Annex B, respectively. Glyko        
shareholders are encouraged to read the Acquisition Agreement and related       
exhibits in their entirety and the other information contained in this Joint    
Proxy Circular, including the annexes, carefully before deciding how to vote.   

Record Date for Special Meeting                                                 

 Pursuant to the interim order in respect of the arrangement the record date
for determining the Glyko shareholders entitled to notice of and to attend in   
person, or appoint a proxy nominee to attend, and vote at the special meeting   
will be July 4, 2002.                                                           

Vote Required                                                                   

The Glyko arrangement resolution and the Glyko continuance resolution must
be approved by not less than two-thirds of the votes cast by the holders of     
Glyko common shares, voting in person or by proxy, at the Glyko special         
meeting. The Glyko common shares vote together as a single class, and each      
common share entitles the holder to one vote on all matters presented at the    
Glyko special meeting.                                                          

As of July 4, 2002, there were 34,352,823 Glyko common shares outstanding 
and there were options outstanding entitling holders thereof to acquire 81,397  
Glyko common shares. Shareholders representing                                  

46  

DEFM14A
60th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 60th
approximately 27.3% of the Glyko common shares have agreed, subject to certain  
conditions, to vote their shares in favor of the Glyko arrangement resolution   
and the Glyko continuance resolution and to otherwise support the transaction.  

The Glyko shareholders whose names were entered on the register of        
shareholders of Glyko at the close of business on July 4, 2002 will be entitled 
to receive notice of and to attend in person, or appoint a proxy nominee to     
attend, the Glyko special meeting and to vote on a show of hands and, on a      
poll, one vote for each Glyko common share held on that date.                   

The list of shareholders of Glyko will be available for inspection on and 
after July 10, 2002, during usual business hours at the Toronto office of       
Glyko's transfer agent (Computershare Trust Company of Canada) and at the       
special meeting.                                                                

To the knowledge of the directors and senior officers of Glyko, as at July
4, 2002, no person or company beneficially owned, directly or indirectly, or    
exercised control or direction over, Glyko common shares carrying more than 10% 
of the voting rights attributable to all the outstanding Glyko common shares.   

Quorum                                                                          

At least two persons present in person or by proxy or by any other duly   
authorized representative shall constitute a quorum for any meeting of the      
shareholders of Glyko if the persons so present are shareholders of Glyko and   
entitled to cast, in the aggregate, not less than 33% of the votes which all of 
the shareholders of Glyko are entitled to cast; provided that, if at the        
opening of any meeting a quorum is not present, one or more persons present in  
person or by proxy or by any other duly authorized representative shall         
constitute a quorum to adjourn the meeting of the shareholders of Glyko if the  
person or persons so present hold at least one common share of Glyko.           

Non-Registered Shareholders                                                     

Non-registered shareholders should follow the directions of their         
intermediaries with respect to the procedures to be followed for voting.        
Generally, non-registered shareholders will not receive the same proxy form as  
distributed by Glyko to registered shareholders but will be provided with       
either a request for voting instructions or a proxy form executed by the        
intermediary but otherwise uncompleted. Intermediaries will then submit votes   
on behalf of the non-registered shareholders. If you are a non-registered       
shareholder, please submit your voting instructions to your intermediary in     
sufficient time to ensure that your votes are received by Glyko on or before    
5:00 p.m. (Toronto time) on August 13, 2002.                                    

Voting of Proxies at Special Meeting and Revocation of Proxies                  

The form of proxy accompanying this Joint Proxy Circular confers          
discretionary authority upon the proxy nominee with respect to any amendments   
or variations to the matters identified in the notice of special meeting of     
shareholders of Glyko and any other matter which may properly come before the   
Glyko special meeting or any adjournment thereof. Proxyholders who have been    
granted discretionary authority will have discretionary authority to vote only  
on those matters that Glyko, at a reasonable time before solicitation of        
proxies began, was not aware would be presented for action at the meeting. As   
of the date of mailing this Joint Proxy Circular, other than the matters        
referred to under "Purpose of the Special Meeting" above, Glyko was not aware   
of any other matters that would be presented for action at its special meeting. 

 If a proxy given to Glyko management is signed and returned, the securities
represented by the proxy will be voted for or against the Glyko arrangement     
resolution and the Glyko continuance resolution, in accordance with the         
instructions marked on the proxy. If no instructions are marked, the securities 

47  

DEFM14A
61st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 61st
represented by such a proxy will be voted FOR the Glyko arrangement resolution  
and FOR the Glyko continuance resolution and in accordance with Glyko           
management's recommendation with respect to amendments or variations of the     
matters set out in the Glyko notice of special meeting or any other matters     
which may properly come before the Glyko special meeting.                       

The persons named in the Glyko forms of proxy are directors or officers of
Glyko. A Glyko shareholder has the right to appoint a person (who need not be a 
Glyko shareholder) to represent such shareholder at the Glyko special meeting   
other than the persons designated in the forms of proxy and may exercise such   
right by inserting the name in full of the desired person in the blank space    
provided in the Glyko forms of proxy and striking out the names now designated. 

  Shareholders who do not expect to attend the Glyko special meeting in person
are requested to complete, sign, date and return the enclosed form of proxy in  
the enclosed envelope addressed to Glyko Biomedical Ltd., c/o Computershare     
Trust Company of Canada, 100 University Avenue, 9th Floor, Toronto, Ontario,    
Canada M5J 2Y1, facsimile number (416) 981-9800. The Glyko form of proxy must   
be received by no later than 5:00 p.m. (Toronto time) on August 13, 2002 or, in 
the event that the Glyko special meeting is adjourned or postponed, by no later 
than 5:00 p.m. (Toronto time) on the second business day prior to the day fixed 
for the adjourned or postponed Glyko special meeting.                           

A Glyko shareholder executing the form of proxy enclosed with the Glyko   
circular has the power to revoke it by instrument in writing executed by the    
Glyko shareholder or an attorney authorized in writing or, where the Glyko      
shareholder is a corporation, by a duly authorized officer or attorney of the   
corporation. The instrument of revocation must be delivered to Glyko Biomedical 
Ltd., c/o Computershare Trust Company of Canada, 100 University Avenue, 9/th/   
Floor, Toronto, Ontario, Canada M5J 2Y1, facsimile number (416) 981-9800 at any 
time up to and including the last business day preceding the date of the Glyko  
special meeting or any adjournment thereof or to the Chairman of the Glyko      
special meeting on the day of the Glyko special meeting or any adjournment      
thereof before any vote in respect of which the proxy is to be used is taken. A 
proxy may also be revoked in any other manner permitted by law.                 

Solicitation of Proxies and Expenses                                            

Glyko is soliciting proxies for the Glyko special meeting from its        
shareholders and BioMarin is soliciting proxies for the BioMarin annual meeting 
from its stockholders. Glyko will bear the costs incurred by Glyko related to   
the solicitation of proxies from its shareholders, including expenses in        
connection with preparing and mailing this Joint Proxy Circular to its          
shareholders. Proxies may also be solicited by certain of Glyko's directors,    
officers and regular employees, without additional compensation, in person or   
by telephone or by facsimile or by e-mail.                                      

Dissenting Shareholder Rights                                                   

Pursuant to the provisions of the interim order, registered Glyko         
shareholders have been granted the right to dissent with respect to the Glyko   
arrangement resolution. Pursuant to the provisions of the Canada Business       
Corporations Act, registered Glyko shareholders have the right to dissent with  
respect to the Glyko continuance resolution. If the arrangement or continuance  
becomes effective, a registered Glyko shareholder who dissents will be entitled 
to be paid the fair value of its Glyko common shares by Glyko. This right to    
dissent is described in this Joint Proxy Circular and in the Plan of            
Arrangement which is attached to this Joint Proxy Circular as Annex B. The      
dissent procedures require that a registered holder of Glyko common shares who  
wishes to dissent must provide to Glyko Biomedical Ltd., 199 Bay Street,        
Toronto, Ontario, M5L 1A9, attention John A. Kolada, facsimile number (416)     
863-2653, a dissent notice at or prior to the Glyko special meeting. It is      
important that Glyko shareholders strictly comply with this requirement and the 
other procedural requirements described in the interim order and this Joint     
Proxy Circular. Failure to comply strictly with the dissent procedures may      
result in the loss or unavailability of any right of dissent. See "Dissenting   
Shareholder Rights."                                                            

48  

DEFM14A
62nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 62nd
Shareholder Proposals                                                           

Holders of Glyko common shares wishing to raise any matter at Glyko's next
annual meeting of shareholders, which will only be held should the transaction  
contemplated hereby not proceed, must have submitted a proposal to Glyko, in    
the manner prescribed by the Canada Business Corporations Act, by no later than 
May 13, 2002.                                                                   

Independent Auditors                                                            

Arthur Andersen LLP, certified public accountants, are the independent    
auditors of Glyko.                                                              

Other Matters                                                                   

As at the date of this Joint Proxy Circular, management of Glyko is not   
aware of any amendments or variations to the Glyko arrangement resolution or    
the Glyko continuance resolution, or of any other matter to be presented to     
shareholders for consideration at the Glyko special meeting.                    

Recommendation of the Glyko Board of Directors                                  

The board of directors of Glyko has approved the Acquisition Agreement and
the arrangement and the transactions contemplated by the Acquisition Agreement  
and the arrangement, including the continuance. Accordingly, the board of       
directors recommends that the shareholders of Glyko vote FOR approval of the    
Glyko arrangement resolution and FOR approval of the Glyko continuance          
resolution. In considering such recommendation, Glyko shareholders should be    
aware that some Glyko directors and officers have interests in the transaction  
which are different from or in addition to, those of Glyko shareholders         
generally, and that BioMarin has agreed to provide indemnification to directors 
and officers of Glyko. For more information about these interests see the       
section of this Joint Proxy Circular entitled "The Transaction--Interest of     
Certain Persons in the Transaction."                                            

The matters to be considered at the Glyko special meeting are of great    
importance to the shareholders of Glyko. Accordingly, you are urged to read and 
carefully consider the information presented in this Joint Proxy Circular,      
including the annexes, and to complete, date, sign and promptly return the      
enclosed form of Glyko proxy card in the enclosed postage paid envelope.        

Contact for Questions and Assistance in Voting                                  

Any Glyko shareholder who has a question about the transaction, the       
arrangement, the continuance, or how to vote or revoke a proxy, or who wishes   
to obtain additional copies of this Joint Proxy Circular, should contact:       

                                                                [Download Table]
                                                                         
Shareholder Services Call Centre                                         
Computershare Trust of Canada                                            

Telephone:     (800) 663-9097 (toll free in the United States and Canada)
               (514) 982-7270                                            

Email:         caregistryinfo@computershare.com                          

49  

DEFM14A
63rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 63rd
THE TRANSACTION 

The following is a description of the material aspects of the transaction,
including the Acquisition Agreement, the Plan of Arrangement, and certain other 
agreements to be entered into in connection with the transaction. While         
BioMarin and Glyko believe that the following description covers the material   
terms of the Acquisition Agreement, the Plan of Arrangement and the related     
transactions and agreements, the description may not contain all of the         
information that is important to you. You should read this entire document and  
the other documents referred to carefully for a more complete understanding of  
the transaction. In particular, the following summaries of the Acquisition      
Agreement and the Plan of Arrangement are not complete and are qualified in     
their entirety by reference to the copy of the Acquisition Agreement and the    
Plan of Arrangement which are attached to this Joint Proxy Circular as Annex A  
and Annex B, respectively, and are incorporated by reference into this Joint    
Proxy Circular in their entirety.                                               

General                                                                         

The BioMarin board of directors and the Glyko board of directors have each
approved the Acquisition Agreement. The Acquisition Agreement provides that     
BioMarin Nova Scotia will acquire all of the Glyko common shares, subject to,   
among other things:                                                             

 .   approval of the arrangement, including the issuance of shares of BioMarin
common stock, by BioMarin stockholders;                             

.   approval of the Glyko arrangement resolution and the Glyko continuance  
resolution by the Glyko shareholders; and                           

.   approval of the arrangement by the Superior Court of Justice (Ontario). 

Pursuant to the arrangement, BioMarin Nova Scotia will acquire all of the 
outstanding common shares of Glyko (other than those of Glyko shareholders who  
properly exercise their dissent rights and are paid the fair value of their     
shares by Glyko), and the Glyko shareholders (other than those who properly     
exercise their dissent rights) will receive from BioMarin Nova Scotia for each  
Glyko common share held 0.3309 of a share of BioMarin common stock. To enable   
BioMarin Nova Scotia to deliver such shares, BioMarin will issue up to          
11,367,617 shares of its common stock in accordance with the terms of the       
Acquisition Agreement. As a consequence of the consummation of the arrangement, 
Glyko will become an indirect wholly-owned subsidiary of BioMarin. After the    
arrangement is completed, BioMarin intends to exchange the 11,367,617 shares of 
BioMarin common stock owned by Glyko for shares of Series A Preferred Stock of  
BioMarin and to cancel such 11,367,617 shares of common stock. No certificates  
representing fractional shares of BioMarin common stock shall be issued upon    
the surrender for exchange of certificates representing Glyko common shares. In 
lieu of any such fractional securities, each person otherwise entitled to a     
fractional interest (after aggregating all fractional shares of BioMarin common 
stock that otherwise would be received by such holder) in a share of BioMarin   
common stock will be entitled to receive from BioMarin Nova Scotia a cash       
payment (rounded to the nearest whole cent), without interest, equal to the     
product of (i) such fraction, and (ii) the average closing price of the shares  
of BioMarin common stock for the 20 most recent days that BioMarin common stock 
has traded ending on the second trading day immediately prior to the effective  
date of the arrangement, as reported on Nasdaq. In no event will BioMarin Nova  
Scotia be required to transfer to holders of Glyko common shares more than, in  
the aggregate, 11,367,617 shares of BioMarin common stock in connection with    
the exchange provided for pursuant to the Acquisition Agreement.                

 Neither BioMarin nor, to its knowledge, any of its affiliates, directors or
officers, currently owns any Glyko common shares, except for Messrs. Erich      
Sager and Gwynn Williams who collectively own or exercise control over          
2,858,488 common shares of Glyko. In addition, Erich Sager holds options to     
acquire 12,500 Glyko common shares. Based on the number of Glyko common shares  
outstanding on July 4, 2002, immediately following completion of the            
transaction, the former holders of Glyko common shares will hold in the         
aggregate                                                                       

50  

DEFM14A
64th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 64th
approximately 11,367,617 shares of BioMarin common stock, and the holders of    
Glyko options will hold options to purchase approximately 26,934 shares of      
BioMarin common stock after such Glyko options are exchanged for options to     
purchase shares of BioMarin common stock in accordance with the provisions of   
the Acquisition Agreement. Assuming all Glyko common shares are exchanged for   
BioMarin common stock, the BioMarin common stock owned by Glyko is exchanged    
for BioMarin preferred stock and such common stock is cancelled and excluding   
shares of BioMarin common stock held by former Glyko shareholders prior to the  
arrangement, based upon the number of shares of BioMarin common stock and Glyko 
common shares outstanding as of June 27, 2002, immediately following completion 
of the transaction existing Glyko shareholders would collectively hold          
approximately 21.3% of the outstanding BioMarin common stock. See "Pro Forma    
Capitalization of BioMarin."                                                    

Glyko shareholders who properly exercise their dissent rights will be     
entitled to be paid the fair value of their Glyko common shares. The obligation 
of BioMarin to complete the arrangement is subject to the condition that        
holders of no more than one percent of the issued and outstanding Glyko common  
shares shall have exercised and not withdrawn dissent rights in respect of the  
arrangement or the continuance. Dissenters' appraisal rights under the Delaware 
General Corporation Law are not available to BioMarin stockholders in           
connection with the transaction. See "Dissenting Shareholder Rights."           

Treatment of Stock Options                                                      

  At the implementation time of the arrangement, each Glyko option to purchase
common shares will be exchanged for an option to purchase BioMarin common stock 
granted in accordance with BioMarin's 1997 Stock Plan, as amended. Each         
replacement option will constitute an option to purchase that number of shares  
of BioMarin common stock equal to the product of the exchange ratio (0.3309),   
and the number of Glyko common shares subject to the Glyko option, rounding     
down to the nearest whole share of BioMarin common stock. Each replacement      
option will provide for an exercise price per share of BioMarin common stock    
equal to the U.S. dollar equivalent of the exercise price per share of the      
Glyko option immediately prior to the implementation time of the arrangement    
divided by 0.3309 and rounding up to the nearest cent. The restrictions on      
exercise and term of replacement options will otherwise be unchanged from those 
of the Glyko options for which they are exchanged.                              

On July 4, 2002, there were outstanding options to purchase Glyko common  
shares which, when vested, would be exercisable to acquire a total of           
approximately 81,397 Glyko common shares at prices between Cdn.$4.50 and        
Cdn.$6.75 with various expiration dates to January 15, 2006.                    

Background of the Transaction                                                   

The provisions of the Acquisition Agreement are the result of negotiations
conducted among representatives of BioMarin and Glyko and their legal and       
financial advisors. The following is a summary of the meetings, negotiations    
and discussions between the parties that preceded execution of the Acquisition  
Agreement.                                                                      

On May 24, 2001, Fredric Price, Chairman and Chief Executive Officer of   
BioMarin, Joerg Gruber, the Chairman of Glyko, Erich Sager, the President and   
Chief Executive Officer of Glyko as well as a director of BioMarin, and John    
Kolada, a director of Glyko, held preliminary discussions at a meeting in       
Novato, California concerning the possibility of a transaction in which Glyko   
shareholders would become direct shareholders in BioMarin.                      

  The results of this meeting were reported to the Glyko board of directors at
a meeting held on May 31, 2001. At that meeting, the Glyko board of directors   
established a transaction committee whose members would be principally          
responsible for negotiating any transaction with BioMarin and reporting back to 
the full board of directors at regular intervals. It was determined at this     
meeting that Erich Sager would not participate in or be made aware of any       
discussions involving Glyko's interests in any transaction with BioMarin, given 
his status as a                                                                 

51  

DEFM14A
65th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 65th
BioMarin board member. The Glyko board of directors determined that the         
transaction committee would comprise Hannes Glaus, Joerg Gruber and John Kolada.

On June 18, 2001, Fredric Price and Joerg Gruber met in London, England to
discuss further a possible combination of the two companies. During that        
meeting, the structure of a possible transaction and the potential advantages   
of a combination of the two companies were discussed. On the basis of this      
meeting, the parties determined that they would continue discussions and would  
work toward developing more specific terms for the proposed transaction.        

Over the ensuing weeks, BioMarin and Glyko and their respective advisors  
discussed various structures for the implementation of a possible transaction   
between the two parties. Glyko's transaction committee reported to the full     
board of directors on these discussions at its meeting held on June 28, 2001.   

At a meeting held on July 9, 2001, the Glyko board of directors again     
discussed a possible transaction with BioMarin. At that meeting, the board of   
directors determined to appoint TD Securities as its financial advisor and      
subsequently engaged TD Securities to act in this capacity.                     

On July 13, 2001, BioMarin and Glyko entered into a confidentiality       
agreement which contained customary standstill, exclusivity and                 
non-solicitation provisions. Shortly thereafter, BioMarin and Glyko and their   
respective legal and financial advisors commenced due diligence investigations  
of one another. The parties' due diligence investigations continued throughout  
the months of July and August 2001.                                             

On July 24, 2001, the BioMarin board of directors discussed the principal 
terms of a transaction whereby BioMarin would acquire the outstanding shares of 
Glyko in exchange for BioMarin equity. At this time, the BioMarin board of      
directors established a committee of independent board members consisting of    
Messrs. Denison and Price with authority to negotiate the terms of the          
transaction.                                                                    

As part of scheduled meetings held on August 2, 19 and 30, 2001, the Glyko
board of directors reviewed the status of discussions and outstanding issues    
concerning a possible transaction with BioMarin and, in particular, focused on  
certain structural considerations and related tax implications, both for Glyko  
and its shareholders.                                                           

During August and September 2001, senior management of BioMarin had       
discussions with BioMarin's legal and financial advisors in connection with     
structural considerations and related tax implications for BioMarin as well as  
other business and legal matters. During September 2001, the parties exchanged  
preliminary drafts of definitive agreements and continued to discuss the        
optimal structure for any transaction that might be implemented by Glyko and    
BioMarin.                                                                       

On September 28, 2001, the BioMarin board of directors determined that any
further discussions regarding a transaction with Glyko would be postponed until 
after the unblinding of the Phase 3 Aldurazyme trial and due to certain other   
competing corporate priorities. On September 28, 2001, Fredric Price advised    
Joerg Gruber that BioMarin wished to postpone further discussions concerning a  
possible transaction. This development was reported to Glyko's board of         
directors at its meeting held on October 1, 2001, at which time the board of    
directors considered at length the implications for Glyko and its shareholders  
of a delay in pursuing further a possible transaction with BioMarin.            

 On December 13, 2001, the BioMarin board of directors determined to proceed
with discussions regarding the proposed transaction with Glyko, and in late     
December 2001, BioMarin advised Glyko that it was prepared to resume            
discussions on a transaction whereby BioMarin would acquire Glyko and Glyko     
shareholders would become direct shareholders of BioMarin.                      

During January 2002, further drafts of definitive agreements were         
circulated, and BioMarin and Glyko and their respective legal and financial     
advisors engaged in extensive discussions and negotiations on the proposed      
transaction. An updated confidentiality agreement was signed by BioMarin and    
Glyko on January 10, 2002.                                                      

52  

DEFM14A
66th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 66th
The preliminary drafts of the definitive agreements circulated in January 
2002 reflected substantially the same commercial terms as the draft agreements  
exchanged in September 2001 between the parties. In particular, the             
consideration to be paid to Glyko shareholders in the January 2002 draft        
acquisition agreement did not change from that set forth in the September 2001  
draft agreement. The changes in the draft agreements distributed in January     
2002 were primarily related to the changes in the structure of the transaction  
and reflected comments on the agreements received from Glyko and its advisors.  
In the draft agreements proposed in September 2001, the transaction             
contemplated an exchangeable share structure whereby Glyko shareholders would   
have received shares of a Canadian subsidiary of BioMarin that would have been  
exchangeable into shares of BioMarin common stock. Due to the additional        
complexity and costs of implementing the exchangeable share structure, the      
agreement was revised to reflect the current structure.                         

On February 1, 2002, TD Securities led a due diligence question and answer
session involving BioMarin senior management. Concurrent with such meeting,     
representatives of Glyko approached certain affiliates of Glyko about the       
possibility of entering into the shareholder support agreements described under 
"-- Other Agreements."                                                          

On February 5, 2002, the boards of directors of BioMarin and Glyko met    
separately to approve the proposed transaction.                                 

At the BioMarin board of directors meeting, BioMarin's financial advisor, 
UBS Warburg LLC, reviewed with the BioMarin board of directors financial        
aspects of the transaction and informed the BioMarin board that, assuming no    
material changes in the transaction and subject to review of the definitive     
Acquisition Agreement, it would be in a position to deliver an opinion          
regarding the fairness, from a financial point of view, to BioMarin of the      
exchange ratio provided for in the transaction upon execution of the definitive 
Acquisition Agreement. At this meeting, the disinterested members of the        
BioMarin board of directors unanimously approved the proposed transaction,      
including the issuance of shares of BioMarin common stock in connection         
therewith, and the Acquisition Agreement, subject to such changes or            
modifications to the Acquisition Agreement as the Chief Executive Officer of    
BioMarin may determine and subject to receipt of UBS Warburg's opinion, which   
was subsequently delivered on February 6, 2002, the date on which the           
Acquisition Agreement was executed.                                             

 At the Glyko board of directors meeting, a presentation was made by Glyko's
financial advisors, TD Securities, as part of which TD Securities provided      
their oral opinion to the board of directors that the consideration to be       
received by Glyko's shareholders under the proposed transaction was fair, from  
a financial point of view, as of that date. The Glyko board of directors        
unanimously approved the proposed transaction and authorized the execution of   
the Acquisition Agreement.                                                      

  On February 6, 2002, Glyko's board of directors received the written opinion
of TD Securities in the form attached as Annex G to this Joint Proxy Circular.  

 The Acquisition Agreement was executed on February 6, 2002, and shareholder
support agreements with certain shareholders of Glyko (including all directors  
who are shareholders), representing in the aggregate approximately 27.3% of the 
outstanding Glyko common shares, were delivered concurrently. BioMarin and      
Glyko each disseminated a press release announcing the transaction before the   
opening of markets on February 7, 2002 in the United States, Canada and         
Switzerland.                                                                    

Joint Reasons for the Transaction                                               

The following discussion of BioMarin's and Glyko's reasons for the        
transaction contains a number of forward-looking statements that reflect the    
current views of BioMarin and Glyko with respect to future events that may have 
an effect on the companies' future financial performance taken as a whole.      
Forward-looking statements are subject to risks and uncertainties. Actual       
results and outcomes may differ materially from the results and outcomes        
discussed in the forward-looking statements. Cautionary statements that         
identify important                                                              

53  

DEFM14A
67th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 67th
factors that could cause or contribute to differences in results and outcomes   
include those discussed in the sections of this Joint Proxy Circular entitled   
"Cautionary Statements Regarding Forward-Looking Statements in this Document"   
and "Risk Factors."                                                             

The boards of directors of BioMarin and Glyko approved the Acquisition    
Agreement and the transactions contemplated by the Acquisition Agreement,       
including the arrangement and the issuance of shares of BioMarin common stock,  
because they determined that the stockholders of their respective companies     
will benefit from the transaction. Among other benefits, the boards of          
directors believe that:                                                         

.   the stockholders of BioMarin, including former Glyko shareholders, will 
benefit from BioMarin's simplified share ownership structure;       

.   the stockholders of BioMarin, including former Glyko shareholders, will 
     benefit from the increased number of holders of shares of BioMarin common
   stock as the liquidity of the BioMarin common stock should be enhanced;
and                                                                 

.   the shareholders of Glyko will benefit from having direct ownership     
  interests in BioMarin and from the increased liquidity associated with
holding BioMarin's common stock.                                    

Recommendation of BioMarin's Board of Directors                                 

At a meeting held on February 5, 2002, the disinterested members of the   
board of directors of BioMarin, which constitute a majority of the BioMarin     
board of directors, unanimously:                                                

.   determined that the transaction is advisable, and is fair to and in the 
best interest of BioMarin and its stockholders;                     

.   approved the Acquisition Agreement, subject to such changes or          
  modifications as the Chief Executive Officer of BioMarin may determine
 and subject to receipt of the written opinion of BioMarin's financial
   advisor in the form considered by the board at its meeting as described
below;                                                              

.   directed that the issuance of shares of BioMarin common stock in        
connection with the transaction be submitted for consideration by   
BioMarin stockholders at a BioMarin annual meeting; and             

.   resolved to recommend that the BioMarin stockholders vote FOR the       
 transaction, including, without limitation, the issuance of shares of
BioMarin common stock in connection with the transaction.           

In reaching its decisions as described above, the BioMarin board of       
directors consulted with BioMarin's management, BioMarin's legal counsel        
regarding the legal terms of the transaction, and BioMarin's financial advisors 
regarding the financial aspects of the transaction. The material factors that   
the BioMarin board of directors considered in reaching its determination were   
as follows:                                                                     

.   The reasons for the transaction described in the section entitled "Joint
Reasons for the Transaction" of this Joint Proxy Circular.          

.   The historical information concerning BioMarin's and Glyko's respective 
   businesses, prospects, financial performance and condition, operations,
     technology, management and competitive position, including public reports
   concerning results of operations during the most recent fiscal year and
fiscal quarter for each company filed with the U.S. Securities and  
   Exchange Commission. The number of shares of BioMarin common stock held
  by Glyko represents a significant interest in BioMarin. It is possible
    that Glyko could be acquired by a third party in the future, which party
could therefore acquire this significant interest in BioMarin. This 
possibility creates uncertainty for BioMarin and its stockholders.  

.   BioMarin's management's view of the financial condition, results of     
   operations and businesses of BioMarin and Glyko before and after giving
   effect to the transaction. The potential acquisition of Glyko would not
entail the assumption of any significant liabilities or obligations,
other than a contingent tax liability with respect to a capital gain
which would be realized on a taxable disposition by Glyko of its    

54  

DEFM14A
68th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 68th
   BioMarin common stock (or Series A Preferred Stock for which the common
     stock will be exchanged) as discussed under "Contingent Capital Gains Tax
  Liability to BioMarin." Accordingly, once the transaction is complete,
   there will be no continuing material impact on BioMarin's operations or
financial position.                                                 

.   The current financial market conditions and historical market prices,   
    volatility and trading information with respect to BioMarin common stock
and Glyko common shares. Converting the current Glyko shareholders' 
     interest in BioMarin from an indirect interest through their ownership of
   Glyko common shares to a direct ownership of BioMarin common stock will
   increase the number of publicly traded shares of BioMarin common stock.
  The BioMarin board believes that this should increase the liquidity of
  BioMarin common stock and could mitigate the volatility of the trading
price of BioMarin common stock.                                     

.   The relationship between the market value of the common shares of Glyko 
   and the consideration to be paid to shareholders of Glyko in connection
with the transaction. The BioMarin board of directors noted that the
Glyko common shares have traded at both a discount and premium as   
compared to the trading price of the BioMarin common stock. This    
discount/premium ranged from a 32.4% discount to an 8.6% premium, as
computed on the first trading day of each month from August 2001 to 
     January 2002. The BioMarin board determined that, based on the historical
    range of the discount/premium, the consideration to be paid to the Glyko
   shareholders in the transaction was reasonable based on the benefits to
be received by BioMarin.                                            

.   The structure of the transaction and the belief that the terms of the   
     Acquisition Agreement, including the parties' representations, warranties
  and covenants, and the conditions to their respective obligations, are
  reasonable. BioMarin's board of directors was satisfied that under the
   plan of arrangement, BioMarin would not incur any United States federal
   income taxes as a result of the completion of the transaction. Based on
discussions with BioMarin's legal counsel and comparisons to other  
     similar transactions, the BioMarin board of directors determined that the
    Acquisition Agreement included terms that are customary for transactions
of this type.                                                       

.   The financial presentation of, and discussions with, UBS Warburg,       
including its written opinion dated February 6, 2002 to the BioMarin
     board of directors as to the fairness, from a financial point of view and
     as of the date of the opinion, to BioMarin of the exchange ratio provided
     for in the Acquisition Agreement, as more fully described below under the
section entitled "Opinion of BioMarin's Financial Advisor."         

.   The impact of the transaction and its announcement on the trading volume
    and the trading characteristics of BioMarin's common stock. The BioMarin
  board of directors believes that the increased liquidity of BioMarin's
    common stock following the transaction will be advantageous to BioMarin.
   The board believes that the increased number of holders will reduce the
    volatility of the trading price of BioMarin's common stock and cause its
  trading price to be more representative of BioMarin's enterprise value
and less related to the limited liquidity of its shares.            

.   The fact that BioMarin stockholders will have the opportunity to vote   
   upon the proposal to approve the transaction, including the issuance of
   shares of BioMarin common stock in connection with the transaction. The
BioMarin board of directors considered that the approval of the     
stockholders is an important independent check on the merits of the 
transaction.                                                        

 .   The interests that certain directors of BioMarin may have with respect to
the transaction in addition to their interests as stockholders of   
   BioMarin generally, as described in more detail in the section entitled
    "Interests of Certain Persons in the Transaction." The BioMarin board of
    directors considered the interests of these directors. In recognition of
the potential conflict created by these interests, the disinterested
directors of BioMarin considered the merits of the transaction      
     independently of the interested directors. These disinterested directors,
     who constitute a majority of the BioMarin board of directors, unanimously
approved the transaction.                                           

55  

DEFM14A
69th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 69th
.   The reports from BioMarin's management and legal and financial advisors 
   as to the results of the due diligence investigation of Glyko which did
 not reveal any information that the BioMarin board believed presented
   significant risks or uncertainties related to the transaction that were
not contemplated prior to such investigation.                       

 In addition, the BioMarin board of directors also identified and considered
a variety of potentially negative factors in its deliberations concerning the   
transaction, including, but not limited to:                                     

.   The possibility that the transaction might not be completed, or that    
     completion might be unduly delayed, and the effect of public announcement
   of the transaction on BioMarin's stock price. If the transaction is not
    completed, BioMarin will have incurred substantial expenses and utilized
 significant management resources with little or no return. Similarly,
   undue delays in the transaction could significantly increase BioMarin's
     transaction costs. As BioMarin has no revenue from the sales of products,
    all of the transaction costs must be paid with current capital reserves.
     A decision to terminate the transaction following its public announcement
may have an adverse impact on the trading price of BioMarin's common
stock.                                                              

.   The substantial charges to be incurred in connection with the           
transaction, including transaction expenses. The estimated fees and 
    expenses that BioMarin has incurred and expects to incur to complete the
transaction total approximately $2.6 million. The BioMarin board of 
directors determined that these fees were reasonable in light of the
  complexity of the transaction and were justified based on the benefits
expected from completing the transaction.                           

.   The terms of the Acquisition Agreement regarding Glyko's right to       
     consider and negotiate acquisition proposals in certain circumstances, as
well as the possible effects of the provisions regarding payment of 
 termination fees. The Acquisition Agreement allows Glyko the right to
    consider and negotiate competing proposals under certain conditions. The
    BioMarin board of directors believes that the termination fee payable to
BioMarin in such a situation justifies the risk associated with this
    right. Similarly, the BioMarin board of directors determined that it was
    fair to pay Glyko a termination fee under certain circumstances in light
  of the significant expenses Glyko was likely to incur in the course of
the transaction.                                                    

.   The substantial contingent capital gains tax liability to Glyko under   
Canadian and United States federal income tax laws upon a taxable   
   disposition of the shares of BioMarin held by Glyko. The BioMarin board
    of directors understands that, by completing the transaction BioMarin is
assuming a contingent tax liability of approximately $6 million     
    associated with the possible eventual disposition of the BioMarin common
    stock (which will be exchanged for Series A Preferred Stock of BioMarin)
   held by Glyko. The BioMarin board of directors determined that the risk
associated with recognizing this contingent liability is within     
BioMarin's control and is therefore manageable.                     

.   The various other risks associated with the transaction described in the
section entitled "Risk Factors" of this Joint Proxy Circular.       

The BioMarin board of directors concluded, however, that these negative   
factors could be managed or mitigated by BioMarin and by the consolidated       
company or were unlikely to have a material impact on the transaction or the    
consolidated company, and that, overall, the potentially negative factors       
associated with the transaction were outweighed by the potential benefits of    
the transaction. For example, the BioMarin board of directors believes that:    

.   the transaction could be completed on the proposed terms; and           

.   costs relating to the transaction would not exceed the proposed benefits
of the transaction.                                                 

The above discussion of the factors considered by the BioMarin board of   
directors is not intended to be exhaustive, but does set forth all of the       
material factors considered by the BioMarin board of directors. The             

56  

DEFM14A
70th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 70th
disinterested members of the BioMarin board of directors collectively reached   
the unanimous conclusion to approve the Acquisition Agreement and the           
transaction, including the issuance of shares of BioMarin common stock in       
connection therewith, in light of the various factors described above and other 
factors that each member of the BioMarin board of directors felt were           
appropriate. In view of the wide variety of factors considered by the BioMarin  
board of directors in connection with its evaluation of the transaction and the 
complexity of these matters, the BioMarin board of directors did not consider   
it practical, and did not attempt, to quantify, rank or otherwise assign        
relative weights to the specific factors it considered in reaching its          
decision. Rather, the BioMarin board of directors made its recommendation based 
on the totality of information presented to and the investigation conducted by  
it. In considering the factors discussed above, individual directors may have   
given different weights to different factors.                                   

Opinion of BioMarin's Financial Advisor                                         

On February 6, 2002, UBS Warburg delivered to the BioMarin board of       
directors a written opinion dated the same date, to the effect that, as of that 
date and based on and subject to various assumptions made, matters considered   
and limitations described in the opinion, the exchange ratio of 0.3309 of a     
share of BioMarin common stock for each Glyko common share was fair, from a     
financial point of view, to BioMarin.                                           

The full text of UBS Warburg's opinion describes, among other things, the 
assumptions made, procedures followed, matters considered and limitations on    
the review undertaken by UBS Warburg. This opinion is attached as Annex F and   
is incorporated into this Joint Proxy Circular by reference. UBS Warburg's      
opinion is directed only to the fairness, from a financial point of view, to    
BioMarin of the exchange ratio and does not address any other aspect of the     
transaction. The opinion does not address the relative merits of the            
transaction as compared to other business strategies or transactions that might 
be available with respect to BioMarin or BioMarin's underlying business         
decision to effect the transaction, nor does the opinion constitute a           
recommendation to any stockholder as to how such stockholder should vote with   
respect to any matters relating to the proposed transaction. Holders of         
BioMarin common stock are encouraged to read this opinion carefully and in its  
entirety. The summary of UBS Warburg's opinion described below is qualified in  
its entirety by reference to the full text of its opinion.                      

In arriving at its opinion, UBS Warburg, among other things:              

.   reviewed current and historical market prices and trading volumes of    
BioMarin common stock and Glyko common shares;                      

 .   reviewed publicly available business and historical financial information
relating to BioMarin and Glyko;                                     

 .   reviewed internal financial information and data relating to BioMarin and
   its business and financial prospects, including estimates and financial
   forecasts prepared by the management of BioMarin, that were provided to
 or discussed with UBS Warburg by BioMarin and not publicly available;

.   conducted discussions with members of the senior management of BioMarin;

 .   considered the pro forma capitalization of BioMarin and pro forma effects
of the transaction on the financial statements of BioMarin;         

.   reviewed the Acquisition Agreement and related documents; and           

.   conducted other financial studies, analyses and investigations, and     
considered other information, as UBS Warburg deemed necessary or    
appropriate.                                                        

 In connection with its review, with BioMarin's consent, UBS Warburg did not
assume any responsibility for independent verification of any of the            
information that UBS Warburg was provided or reviewed for the purpose of its    
opinion and, with BioMarin's consent, UBS Warburg relied on that information    
being complete and                                                              

57  

DEFM14A
71st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 71st
accurate in all material respects. In addition, at BioMarin's direction, UBS    
Warburg did not make any independent evaluation or appraisal of any of the      
assets or liabilities, contingent or otherwise, of BioMarin or Glyko, and was   
not furnished with any evaluation or appraisal. With respect to the financial   
forecasts and estimates relating to BioMarin that it reviewed, UBS Warburg      
assumed, at BioMarin's direction, that they were reasonably prepared on a basis 
reflecting the best currently available estimates and judgments of the          
management of BioMarin as to the future financial performance of BioMarin. UBS  
Warburg's opinion was necessarily based on economic, monetary, market and other 
conditions existing, and information available to UBS Warburg, on the date of   
its opinion. Although subsequent developments may affect its opinion, UBS       
Warburg does not have any obligation to update, revise or reaffirm its opinion. 

UBS Warburg was not asked to, and it did not, offer any opinion as to the 
terms of the Acquisition Agreement or related documents and the obligations     
thereunder, or the form of the transaction. UBS Warburg expressed no opinion as 
to the value of BioMarin common stock when issued in the transaction or the     
prices at which BioMarin common stock will trade or otherwise be transferable   
at any time. UBS Warburg also assumed, with BioMarin's consent, that the        
transaction would constitute a tax-free reorganization for BioMarin and         
BioMarin Nova Scotia for U.S. federal income tax purposes and that no Canadian  
income tax would be payable by BioMarin or BioMarin Nova Scotia in connection   
with the transaction. In rendering its opinion, UBS Warburg assumed, at         
BioMarin's direction, that each of BioMarin, Glyko and BioMarin Nova Scotia     
would comply with all material covenants and agreements contained in, and other 
material terms of, the Acquisition Agreement and related documents and that the 
transaction would be consummated in accordance with its terms without waiver,   
modification or amendment of any material term, condition or agreement. Except  
as described above, BioMarin imposed no other instructions or limitations on    
UBS Warburg with respect to the investigations made or the procedures followed  
by UBS Warburg in rendering its opinion.                                        

In connection with rendering its opinion to BioMarin's board of directors,
UBS Warburg performed a variety of financial and comparative analyses which are 
summarized below. The following summary is not a complete description of all of 
the analyses performed and factors considered by UBS Warburg in connection with 
its opinion. The preparation of a fairness opinion is a complex process         
involving subjective judgments and is not necessarily susceptible to partial    
analysis or summary description.                                                

UBS Warburg believes that its analyses and the summary below must be      
considered as a whole and that selecting portions of its analyses and factors,  
without considering all analyses and factors, could create a misleading or      
incomplete view of the processes underlying UBS Warburg's analyses and opinion. 
None of the analyses performed by UBS Warburg was assigned greater significance 
by UBS Warburg than any other. UBS Warburg arrived at its ultimate opinion      
based on the results of all analyses undertaken by it and assessed as a whole   
and believes that the totality of the factors considered and analyses performed 
by UBS Warburg in connection with its opinion operated collectively to support  
UBS Warburg's determination as to the fairness of the exchange ratio from a     
financial point of view. UBS Warburg did not draw, in isolation, conclusions    
from or with regard to any one factor or method of analysis.                    

  The estimates of BioMarin's future performance provided by the management of
BioMarin in or underlying UBS Warburg's analyses are not necessarily indicative 
of future results or values, which may be significantly more or less favorable  
than those estimates. In performing its analyses, UBS Warburg considered        
industry performance, general business and economic conditions and other        
matters, many of which are beyond the control of BioMarin. Estimates of the     
financial value of companies do not necessarily purport to be appraisals or     
reflect the prices at which companies actually may be sold.                     

The exchange ratio was determined through negotiation between BioMarin and
Glyko and the decision to enter into the transaction was solely that of         
BioMarin's board of directors. UBS Warburg's opinion and financial analyses     
were only one of many factors considered by BioMarin's board of directors in    
its evaluation of the transaction and should not be viewed as determinative of  
the views of BioMarin's board of directors or management with respect to the    
transaction or the exchange ratio.                                              

58  

DEFM14A
72nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 72nd
The following is a brief summary of the material financial analyses       
performed by UBS Warburg and reviewed with BioMarin's board of directors in     
connection with its opinion:                                                    

Pro Forma Equity Impact Analysis                                            

UBS Warburg analyzed the potential pro forma effect of the transaction on 
the percentage equity ownership in BioMarin of the holders of BioMarin common   
stock other than Glyko relative to the holders of Glyko common shares who hold  
shares of BioMarin common stock indirectly through Glyko. The number of         
outstanding shares of BioMarin common stock used in this analysis of            
approximately 53.07 million was adjusted, based on internal estimates of        
BioMarin's management, for BioMarin's acquisition of Synapse Technologies Inc.  
The percentage equity ownership in BioMarin of the holders of Glyko common      
shares before giving effect to the transaction was implied by the total number  
of shares of BioMarin common stock held by Glyko of approximately 11.37         
million. This analysis indicated that, based on the exchange ratio, the equity  
ownership percentages in BioMarin of the holders of BioMarin common stock other 
than Glyko and the holders of Glyko common shares of approximately 78.6% and    
21.4%, respectively, would remain the same both before and immediately upon     
completion of the transaction except that, after giving effect to the           
transaction, the holders of Glyko common shares will hold shares of BioMarin    
common stock directly rather than indirectly through Glyko.                     

  UBS Warburg also evaluated the potential pro forma effect of the transaction
on the implied value of Glyko common shares by comparing the market value of    
Glyko common shares of approximately $118.8 million in the aggregate relative   
to the market value of BioMarin common stock held by Glyko of approximately     
$137.7 million in the aggregate based on the closing prices of Glyko common     
shares and BioMarin common stock of Cdn$5.50 and $12.11, respectively, per      
share as reported through FactSet, a major online source for financial and      
economic information, on February 1, 2002. This comparison indicated an         
aggregate market discount of approximately $18.9 million for Glyko common       
shares as of that date which, based on the exchange ratio, would be eliminated  
upon completion of the transaction. Actual values of Glyko common shares may    
vary and such variations may be material.                                       

Pro Forma Financial Statement Impact Analysis                               

UBS Warburg analyzed the potential pro forma effect of the transaction on 
BioMarin's estimated earnings (loss) per share, commonly referred to as EPS,    
for fiscal year 2002, based on internal estimates of the management of          
BioMarin, excluding extraordinary and transaction related costs. The number of  
outstanding shares of BioMarin common stock used in this analysis was adjusted, 
based on internal estimates of BioMarin's management, for BioMarin's            
acquisition of Synapse Technologies Inc. Based on the exchange ratio, this      
analysis indicated that the transaction would be neutral to BioMarin's          
estimated EPS for fiscal year 2002. UBS Warburg also noted that, based on the   
exchange ratio, the total number of outstanding shares of BioMarin common stock 
would remain the same before and immediately upon completion of the             
transaction. The actual results achieved by BioMarin post-transaction may vary  
from projected results and the variations may be material.                      

Other Factors                                                               

In rendering its opinion, UBS Warburg also reviewed and considered other  
factors, including:                                                             

.   historical trading volumes and market prices for BioMarin common stock  
 and Glyko common shares for the period January 1, 2001 to February 1,
    2002, which trading volumes ranged from approximately 4,600 to 4,740,500
shares per trading day for BioMarin common stock and from none to   
     1,255,678 shares per trading day for Glyko common shares and which market
  prices ranged from approximately U.S.$7.31 to U.S.$14.16 per share for
    BioMarin common stock and approximately U.S.$2.38 to U.S.$4.56 per share
for Glyko common shares, and the relationship between movements in  
BioMarin common stock and Glyko common shares for the same period,  
including the discounts (premia) over that period implied for Glyko 
    common shares based on the market prices of Glyko common shares relative
     to the implied per share value of Glyko common shares based on the market
 value of the total number of shares of BioMarin held by Glyko and the
book value of Glyko's other net assets; and                         

59  

DEFM14A
73rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 73rd
.   the public float, defined as total outstanding shares of common stock   
excluding shares owned by directors, officers and 5% holders, as a  
     percentage of the total outstanding shares of BioMarin common stock, both
    before and after giving effect to the transaction of approximately 66.4%
and 85.6%, respectively, and as compared to the public float as a   
percentage of the total outstanding shares of the common stock of   
selected publicly traded companies in the bio-technology industry.  

Miscellaneous                                                               

BioMarin has agreed to pay UBS Warburg for its financial advisory services
in connection with the transaction an aggregate fee of approximately $1.0       
million, of which approximately $450,000 is contingent upon completion of the   
transaction. In addition, BioMarin has agreed to reimburse UBS Warburg for its  
reasonable expenses, including reasonable fees and disbursements of its         
counsel, and to indemnify UBS Warburg and related parties against liabilities,  
including liabilities under federal securities laws, relating to, or arising    
out of, its engagement.                                                         

BioMarin selected UBS Warburg as its exclusive financial advisor in       
connection with the transaction because UBS Warburg is an internationally       
recognized investment banking firm with substantial experience in similar       
transactions. UBS Warburg is continually engaged in the valuation of businesses 
and their securities in connection with mergers and acquisitions, leveraged     
buyouts, negotiated underwritings, competitive bids, secondary distributions of 
listed and unlisted securities and private placements.                          

 UBS Warburg and its affiliates in the past have provided, and currently are
providing, services to BioMarin unrelated to the proposed transaction, for      
which services UBS Warburg and its affiliates have received and will receive    
customary compensation. In the ordinary course of business, UBS Warburg, its    
successors and affiliates may actively trade the securities of BioMarin and     
Glyko for their own accounts and the accounts of their customers and,           
accordingly, may at any time hold a long or short position in those securities. 

Recommendation of Glyko's Board of Directors                                    

 The Glyko board of directors believes that the terms of the arrangement are
fair to Glyko shareholders and in the best interests of Glyko. Accordingly, the 
Glyko board of directors unanimously approved the Acquisition Agreement and     
resolved to recommend that Glyko's shareholders vote FOR the Glyko arrangement  
resolution and FOR the Glyko continuance resolution.                            

  Each of the directors of Glyko has advised Glyko that he will vote the Glyko
common shares held by him, directly or indirectly, in favor of the Glyko        
arrangement resolution approving the arrangement and the Glyko continuance      
resolution approving the continuance.                                           

In approving the Acquisition Agreement, the Glyko board of directors      
considered a number of factors, including:                                      

.   The reasons for the transaction described in the section entitled "Joint
Reasons for the Transaction" of this Joint Proxy Circular.          

.   The structure of the transaction. The Glyko board of directors was      
satisfied that, under the plan of arrangement, Glyko would incur no 
   liability for Canadian federal income tax as a result of the completion
     of the transaction and Glyko shareholders who are not residents of Canada
     and whose shares do not constitute taxable Canadian property would not be
    subject to Canadian federal income tax as a result of the disposition of
Glyko common shares pursuant to the arrangement.                    

.   Historical information concerning Glyko's and BioMarin's respective     
   businesses, prospects, financial performance and condition, operations,
     technology, management and competitive position, including public reports
   concerning results of operations during the most recent fiscal year for
each company filed with the U.S. Securities and Exchange Commission.

60  

DEFM14A
74th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 74th
.   Management's view of the financial condition, results of operations and 
  businesses of Glyko and BioMarin before and after giving effect to the
transaction.                                                        

.   The lack of viable alternatives available to Glyko given Glyko's limited
  resources and lack of operational assets. Following a review of market
opportunities, the Glyko board of directors concluded that Glyko's  
    principal current alternative to proceeding with the plan of arrangement
 transaction was to become an operating company by acquiring operating
   assets, which the board did not believe was feasible at this time given
  Glyko's resources, nor would there be any guarantee of success if such
alternative was chosen.                                             

.   Current financial market conditions and historical market prices,       
  volatility and trading information with respect to Glyko common shares
and BioMarin common stock.                                          

.   The amount of tax that would be payable by Glyko in the event it were to
dispose of its holding of BioMarin common stock. The Glyko board of 
directors understands that, if Glyko disposed of its common stock of
 BioMarin, any gain realized by Glyko on such disposition for Canadian
   federal and provincial income tax purposes would be subject to Canadian
federal and provincial income tax.                                  

.   The potentially adverse tax implications for Glyko and its shareholders 
in the event Glyko were to distribute its holding of BioMarin common
stock directly to its shareholders. The Glyko board of directors was
advised that a distribution of BioMarin common stock by Glyko to its
    shareholders would result in a disposition of such common stock by Glyko
(and the imposition of Canadian federal and provincial income tax on
    Glyko on any gain considered to be realized on the disposition), as well
    as shareholder level taxes on a distribution of BioMarin common stock to
Glyko shareholders.                                                 

 .   The costs inherent in maintaining Glyko's status as a reporting issuer in
  Canada and as a registrant under the United States Securities Exchange
Act of 1934. Glyko incurred general and administrative expenses of  
     approximately $460,000 in 2001. As Glyko has no operations, a significant
    portion of these expenses were associated with maintaining its status as
 a reporting issuer in Canada and a registrant under the United States
Securities Exchange of 1934.                                        

.   The discount to the underlying value of Glyko's assets, including its   
  shares of BioMarin common stock, at which the Glyko common shares have
     historically traded on the Toronto Stock Exchange. TD Securities reported
    to the Glyko board of directors that during 2001 the Glyko common shares
   traded at an implied discount of up to 20% of the value of the BioMarin
common stock owned by Glyko.                                        

.   The fact that Glyko shareholders will receive shares of BioMarin common 
    stock under the transaction that are more liquid than their Glyko common
shares. The Glyko board of directors noted that an average of       
     approximately 495,000 shares of BioMarin common stock traded daily on the
Nasdaq during the fourth quarter of 2001, compared to an average of 
approximately 67,000 Glyko shares trading daily on the Toronto Stock
Exchange during the same period.                                    

.   The belief that the terms of the Acquisition Agreement, including the   
     parties' representations, warranties and covenants, and the conditions to
their respective obligations, are reasonable.                       

.   Certain terms and conditions of the Acquisition Agreement, including the
     fact that a termination fee is payable to Glyko by BioMarin under certain
   circumstances, and that, subject to certain conditions, the Acquisition
Agreement does not prevent Glyko from accepting a Superior Offer.   

.   The fairness opinion of Glyko's financial advisor, TD Securities.       

.   The fact that Glyko shareholders will have the opportunity to vote upon 
and approve the transaction.                                        

.   The fact that the approval of the Superior Court of Justice (Ontario) to
 the arrangement is a condition to the closing of the transaction. The
  Glyko board of directors noted that the Superior Court of Justice will
   satisfy itself as to the fairness of the transaction prior to approving
the transaction.                                                    

61  

DEFM14A
75th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 75th
.   Reports from management and financial advisors as to the results of the 
due diligence investigation of BioMarin.                            

.   Other factors that the Glyko board of directors deemed relevant in order
to make its decision.                                               

  In considering the transaction, the Glyko board of directors recognized that
there were certain risks associated with the transaction, including the risks   
that the potential benefits set forth above may not be realized and that there  
may be higher than anticipated costs associated with realizing such benefits.   
The Glyko board of directors also considered the factors set forth in this      
Joint Proxy Circular under the heading "Risk Factors."                          

In addition, the Glyko board of directors also identified and considered a
variety of potentially negative factors in its deliberations concerning the     
transaction, including, but not limited to:                                     

.   The possibility that the transaction might not be completed, or that    
     completion might be unduly delayed, and the effect of public announcement
of the transaction on Glyko's and BioMarin's stock price.           

 .   If the transaction is not completed, Glyko will have incurred substantial
    expenses and utilized significant management resources. Similarly, undue
delays in the transaction could significantly increase Glyko's      
   transaction costs. As Glyko has no operating business, the potential to
  recoup these costs is limited. A decision to terminate the transaction
 following its public announcement might have an adverse impact on the
trading price of Glyko's common shares.                             

.   The provisions of the Acquisition Agreement regarding payment of        
termination fees.                                                   

.   Various other risks associated with the transaction described in the    
section entitled "Risk Factors" of this Joint Proxy Circular.       

  The Glyko board of directors concluded, however, that these negative factors
could be managed or mitigated by Glyko or were unlikely to have a material      
impact on the transaction on Glyko, and that, overall, the potentially negative 
factors associated with the transaction were outweighed by the potential        
benefits of the transaction. For example, the Glyko board of directors believes 
that:                                                                           

.   the transaction could be completed on the proposed terms; and           

.   costs relating to the transaction would not exceed the proposed benefits
of the transaction.                                                 

The foregoing discussion of the information and factors considered by     
Glyko's board of directors, while not exhaustive, includes the material factors 
considered by the Glyko board of directors. In view of the variety of factors   
considered in connection with its evaluation of the transaction, Glyko's board  
of directors did not find it practicable to, and did not, quantify or otherwise 
assign relative or specific weight or values to any of these factors, although  
individual directors may have given different weights to different factors.     

Opinion of Glyko's Financial Advisor                                            

Glyko retained TD Securities to act as its financial advisor in connection
with a proposed transaction whereby all of the outstanding common shares of     
Glyko would be acquired by BioMarin. TD Securities is a nationally recognized   
investment banking firm in Canada with operations in a broad range of           
activities including corporate and government finance, mergers and              
acquisitions, equity and fixed income sales and trading, investment management  
and investment research. TD Securities has participated in a significant number 
of transactions involving public and private companies and has extensive        
experience in preparing fairness opinions. Glyko selected TD Securities to act  
as its financial advisor on the basis of TD Securities' experience and          
expertise in transactions similar to the arrangement and its reputation in the  
community.                                                                      

At the Glyko board of directors meeting held on February 5, 2001, TD      
Securities delivered its oral opinion to the board of directors. On February 6, 
2002, TD Securities confirmed its opinion in writing by delivery of its         

62  

DEFM14A
76th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 76th
written opinion to Glyko's board of directors, based upon and subject to the    
various assumptions and limitations set forth therein, that the consideration   
offered to Glyko shareholders under the arrangement was fair, from a financial  
point of view, as of that date. The exchange ratio was determined by            
negotiations between Glyko and BioMarin and was not based on recommendations    
from TD Securities.                                                             

The full text of TD Securities' written opinion to Glyko's board of       
directors is attached to this Joint Proxy Circular as Annex G which is          
incorporated into this Joint Proxy Circular in its entirety. You should read    
this opinion carefully and in its entirety in connection with this Joint Proxy  
Circular. However, the following summary of TD Securities' opinion has also     
been included, which is qualified in its entirety by reference to the full text 
of the opinion.                                                                 

 TD Securities' opinion does not constitute a recommendation to shareholders
of Glyko on how to vote with respect to the Glyko arrangement resolution or the 
Glyko continuance resolution. The opinion addresses only the fairness of the    
consideration offered to Glyko shareholders pursuant to the transaction, from a 
financial point of view, as of the date of the opinion. The opinion does not    
address the relative merits of the arrangement or the continuance or any        
alternatives to the arrangement or the continuance, the underlying decision of  
Glyko's board of directors to proceed with or effect the arrangement or any     
other aspect of the arrangement.                                                

 For the purposes of its opinion, TD Securities reviewed and relied upon, or
carried out, among other things, the following:                                 

.   the Acquisition Agreement;                                              

.   the form of shareholder support agreement;                              

.   audited financial statements of Glyko and BioMarin for each of the years
ended and as at December 31, 1999 and 2000;                         

.   unaudited interim financial statements of Glyko and BioMarin for the    
 three-month periods ended and as at March 31, 2001, June 30, 2001 and
September 30, 2001;                                                 

.   annual reports and Forms 10-K of Glyko for each of the years ended      
December 31, 1999 and 2000;                                         

.   annual reports and Forms 10-K of BioMarin for each of the years ended   
December 31, 1999 and 2000;                                         

 .   notices of annual meetings of shareholders and management proxy circulars
of Glyko for each of the years ended December 31, 1999 and 2000;    

.   press releases and other regulatory filings of Glyko and BioMarin during
the two year period ending February 5, 2002;                        

.   corporate documents of Glyko, including material contracts and licenses,
minutes of the board and other corporate documents;                 

.   discussions with senior management of Glyko with respect to the         
information referred to above and other issues deemed relevant;     

 .   discussions with Blake, Cassels & Graydon LLP, Canadian legal advisors to
Glyko;                                                              

.   discussions with Arthur Andersen LLP, auditors of Glyko;                

.   a due diligence session and other discussions with senior management of 
BioMarin;                                                           

.   relevant public information, relating to the business, operations,      
  financial performance and share trading history of Glyko, BioMarin and
other selected public information considered to be relevant;        

.   various research publications prepared by equity research analysts      
regarding BioMarin;                                                 

63  

DEFM14A
77th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 77th
 .   representations contained on the certificate dated as of February 6, 2002
from senior officers of Glyko; and                                  

.   such other corporate, industry and financial market information,        
investigations and analyses as TD Securities considered necessary or
appropriate in the circumstances.                                   

  With Glyko's acknowledgement, TD Securities assumed and relied upon, without
independent verification, the accuracy, completeness and fair representation of 
the financial and other information reviewed by TD Securities for the purposes  
of its opinion. The fairness opinion is conditional upon such accuracy,         
completeness and fair representation.                                           

Senior officers of Glyko represented to TD Securities in a certificate    
delivered as of February 6, 2002, among other things, that (i) Glyko has no     
information or knowledge of any facts public or otherwise not specifically      
provided to TD Securities relating to Glyko or BioMarin and its subsidiaries,   
which would reasonably be expected to affect materially the fairness opinion or 
the decision of Glyko to proceed with the arrangement; (ii) the information and 
data provided to TD Securities by or on behalf of Glyko in respect of Glyko in  
connection with the fairness opinion is or, in the case of historical           
information and data, was, at the date of preparation, true and complete in all 
material respects and no additional material, data or information would be      
required to make the information and data provided to TD Securities not         
misleading in the light of circumstances in which it was provided; (iii) to the 
extent that any of the information and data identified in subparagraph          
(ii) above is historical and Glyko has been requested by TD Securities to       
update such information, there have been no changes in any material facts or    
new material facts since the respective dates thereof which have not been       
disclosed to TD Securities or updated by more current information and data not  
provided to TD Securities by Glyko; (iv) there have been no valuations or       
appraisals of Glyko or any material property of Glyko made in the preceding 12  
months and in the possession or control of Glyko other than those which have    
been provided to TD Securities or, in the case of valuations known to Glyko     
which it does not have within its possession or control, notice of which has    
not been given to TD Securities; (v) there have been no offers for or           
transactions involving any material property of Glyko during the preceding 12   
months which have not been disclosed to TD Securities; and (vi) other than in   
connection with the arrangement, Glyko has no information or knowledge of any   
material non-public information concerning the securities, assets, liabilities, 
operations, affairs, prospects or condition (financial or otherwise) of Glyko   
or BioMarin and its subsidiaries that has not been generally disclosed.         

 In preparing its opinion, TD Securities made general assumptions including:

.   all conditions precedent to the completion of the arrangement could be  
satisfied in due course;                                            

.   all consents, permissions, exemptions or orders of relevant regulatory  
      authorities would be obtained, without adverse condition or qualification;

.   the procedures being followed to implement the arrangement are valid and
effective;                                                          

 .   the Joint Proxy Circular will be distributed to the shareholders of Glyko
in accordance with applicable laws;                                 

.   the disclosure in the Joint Proxy Circular will be accurate in all      
material respects and will comply in all material respects with the 
requirements of all applicable laws.                                

For purposes of its opinion, TD Securities was not engaged to provide (and
has not provided) a formal valuation or appraisal of any of the assets or       
liabilities of Glyko or BioMarin. In addition, TD Securities was not requested  
to and did not review any legal, accounting or tax aspects of the arrangement.  
Except as described herein, Glyko imposed no other instructions or limitations  
on TD Securities with respect to the investigations made or the procedures      
followed by TD Securities in rendering its opinion.                             

64  

DEFM14A
78th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 78th
The following is a summary of the material financial analyses performed by
TD Securities and reviewed with Glyko's board of directors in connection with   
TD Securities' fairness opinion:                                                

In determining the value of the Glyko common shares in the context of the 
transaction, TD Securities applied a net asset value ("NAV") approach that      
aggregates the value of Glyko's assets net of all liabilities. Since Glyko's    
primary asset is the BioMarin common stock held by Glyko, the value of the      
Glyko common shares in the context of the transaction required an analysis of   
the value of the BioMarin common stock.                                         

TD Securities believes that the market trading value approach is an       
appropriate indication of the value of the BioMarin common stock in the context 
of the transaction primarily because shares of BioMarin common stock are widely 
held and relatively liquid, and TD Securities was not aware, after due inquiry, 
of any non-public information that, if disclosed, would be expected to have a   
material affect on the market trading price of the BioMarin common stock.       

TD Securities reviewed various alternatives for distributing the value of 
the BioMarin common stock held by Glyko to Glyko shareholders. Based on         
discussions with Glyko's Canadian tax advisors and other considerations, TD     
Securities concluded that if Glyko were to distribute the value of the          
underlying BioMarin common stock to Glyko shareholders, this would result in    
significant tax liability for both Glyko and its shareholders.                  

Under the market trading value approach, the value of the BioMarin common 
stock held by Glyko was the value that could be realized in the context of the  
current market. The value range of the BioMarin common stock was $12.00 to      
$12.74 per share based on the volume weighted average trading prices of         
BioMarin common stock on Nasdaq for the 10 day and 20 day periods ended         
February 1, 2002. This represents a value of $3.97 to $4.22 per Glyko common    
share. On an after-tax basis, assuming Glyko would incur corporate capital      
gains tax on any disposition of its BioMarin common stock, the value range was  
$3.34 to $3.54 per Glyko common share.                                          

The other assets (net of liabilities) of Glyko, primarily consisting of   
cash, were valued at $0.06 to $0.07 per Glyko common share. Combined with the   
above value of the BioMarin common stock held by Glyko, the pre-tax value of    
Glyko common shares was $4.03 to $4.28 or Cdn.$6.32 to Cdn.$6.72 per Glyko      
common share (after-tax $3.40 to $3.60 or Cdn.$5.33 to Cdn.$5.65).              

The value of the consideration to be received by Glyko shareholders was   
derived using the value range for the BioMarin common stock of $12.00 to $12.74 
determined through the market trading value approach and applying the exchange  
ratio pursuant to the arrangement. This results in a value of the consideration 
to be received by Glyko shareholders of $3.97 to $4.22 or Cdn.$6.23 to          
Cdn.$6.61 per Glyko common share, as compared to the pre-tax value of Glyko     
common shares of $4.03 to $4.28 or Cdn.$6.32 to Cdn.$6.72 per share (after-tax  
$3.40 to $3.60 or Cdn.$5.33 to Cdn.$5.65) indicated above.                      

  TD Securities' opinion was based on economic, market and other conditions as
they existed on the date of its opinion and on information made available to it 
as of the date of its opinion. According to the terms of its engagement by      
Glyko, although TD Securities reserves the right to change or withdraw its      
opinion in the event of a change in circumstances, TD Securities has no         
obligation to update, revise or re-affirm its opinion to take into account      
events occurring after the date that its opinion was delivered to Glyko's board 
of directors. As a result, circumstances could develop after the date of its    
opinion and prior to consummation of the arrangement and the continuance that,  
if known at the time TD Securities rendered its opinion, may have altered such  
opinion.                                                                        

The preparation of a fairness opinion is a complex process and is not     
necessarily susceptible to partial analysis or summary description. TD          
Securities believes that its analyses and the summary above must be considered  
as a whole. TD Securities further believes that selecting portions of its       
analyses and the factors considered, without considering all analyses and       
factors, could create an incomplete view of the process underlying the analyses 
set forth in its opinion. TD Securities is not opining as to the market value   
or the prices at which any of the securities of Glyko or BioMarin may trade at  
any time.                                                                       

65  

DEFM14A
79th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 79th
Based upon and subject to the foregoing, TD Securities is of the opinion  
that, as of February 6, 2002, the consideration offered to Glyko shareholders   
under the arrangement is fair, from a financial point of view.                  

  As described above, TD Securities' opinion and presentation to Glyko's board
of directors were among the many factors taken into consideration by Glyko's    
board of directors in making its determination to approve the Acquisition       
Agreement, and to recommend that Glyko's shareholders approve the arrangement   
and the continuance.                                                            

Glyko agreed to pay TD Securities as compensation for its services under  
this engagement a fee of Cdn. $425,000 upon completion of the arrangement.      
Glyko also agreed to pay TD Securities a work fee of Cdn. $40,000 per month,    
which fees will be credited against the arrangement completion fee of Cdn.      
$425,000. Glyko's board of directors was aware of this fee and took it into     
account in considering TD Securities' fairness opinion and in approving the     
arrangement. The engagement letter calls for Glyko to reimburse TD Securities   
for its reasonable out-of-pocket expenses, and Glyko has agreed to indemnify TD 
Securities from and against certain costs and liabilities arising directly or   
indirectly out of the performance of professional services rendered to Glyko by 
TD Securities and its personnel under its engagement.                           

  Neither TD Securities, nor any of its affiliates is an insider, associate or
affiliate (as those terms are defined in the Securities Act (Ontario)) of       
Glyko, BioMarin or any of their respective associates or affiliates. In the     
ordinary course of their businesses, TD Securities and its affiliates may       
actively trade the securities of Glyko and BioMarin for their own account or    
for the accounts of customers.                                                  

Interests of Certain Persons in the Transaction                                 

 In considering how to vote your securities with respect to the transaction,
you should be aware that certain members of the BioMarin board of directors and 
certain members of management and the board of directors of Glyko have certain  
interests in the transaction that may present them with actual or potential     
conflicts of interest in connection with the transaction. The BioMarin board of 
directors and the Glyko board of directors were aware of these interests and    
considered them along with the other matters summarized above. Those interests  
include:                                                                        

.   the receipt by Messrs. Glaus and Specker, directors of Glyko, Mr.       
    Williams, a director of BioMarin and a significant shareholder of Glyko,
Mr. Sager, a director of BioMarin and an executive officer and      
     shareholder of Glyko, and Messrs. Starr and Kakkis, executive officers of
    BioMarin, of approximately 988,000 shares, in the aggregate, of BioMarin
    common stock in exchange for Glyko common shares held by such persons in
   the transaction. These directors and officers will receive the same per
share consideration as other Glyko shareholders in the transaction; 

.   the receipt by Messrs. Allan, Glaus, Gruber, Kolada, Specker and        
Trossman, who are each a director of Glyko, and Mr. Sager, who is an
    officer of Glyko and a director of BioMarin (collectively being the only
     holders of options for Glyko common shares), of options to purchase up to
   approximately 26,934 shares, in the aggregate, of BioMarin common stock
in exchange for options to purchase Glyko common shares held by such
persons; and                                                        

 .   the Acquisition Agreement provides that all rights to indemnification for
officers and directors of Glyko as provided in the articles of      
     incorporation of Glyko, the bylaws of Glyko or the articles and bylaws of
any successor of Glyko, in effect on the effective date of the      
    arrangement, will survive the arrangement for a period not less than six
years from the effective date of the arrangement, and BioMarin will 
assume, effective upon consummation of the arrangement, all such    
     liability in respect of these matters arising prior to the effective date
     of the arrangement. The Acquisition Agreement also provides that, for not
    less than six years from the effective date of the arrangement, BioMarin
will maintain in effect coverage equivalent to that in effect under 
current policies of the directors' and officers' liability insurance
maintained by Glyko on terms comparable to those applicable to the  
   current directors and officers of Glyko, provided that in no event will
     BioMarin or a successor of Glyko be required to expend in any one year an
   amount in excess of 150% of the annual premiums currently paid by Glyko
for such insurance.                                                 

66  

DEFM14A
80th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 80th
In addition, Mr. Erich Sager, the President and Chief Executive Officer of
Glyko, and Mr. Gwynn R. Williams, who exercises control over approximately 8.3% 
of the Glyko common shares, both serve as members of the board of directors of  
BioMarin. Messrs. Sager and Williams fully disclosed these relationships and    
interests to the board of directors of BioMarin prior to the BioMarin board's   
consideration of the transaction. Due to these relationships and interests,     
Messrs. Sager and Williams abstained from votes taken by BioMarin's board to    
approve the transaction. The disinterested members of BioMarin's board, which   
constitute a majority of its members, unanimously approved the transaction,     
including, without limitation, the issuance of shares of BioMarin common stock  
in connection therewith.                                                        

Share Ownership of Directors and Executive Officers and Certain Related Persons 
of BioMarin                                                                     

As of the close of business on June 27, 2002, the directors and executive 
officers of BioMarin (and their respective affiliates, not including Glyko)     
collectively beneficially owned approximately 3.0% of the shares of BioMarin    
common stock entitled to vote at the BioMarin annual meeting. These directors   
include Messrs. Erich Sager and Gwynn Williams who own or control approximately 
8.3% of the Glyko common shares. Furthermore, Glyko owns approximately 21.3% of 
the outstanding shares of BioMarin common stock based on the number of issued   
and outstanding shares of BioMarin common stock as of June 27, 2002.            
Accordingly, the directors and executive officers of BioMarin (and their        
respective affiliates) together with Glyko collectively beneficially own        
approximately 24.3% of the shares of BioMarin common stock entitled to vote at  
the BioMarin annual meeting, which represents a substantial percentage of the   
vote required to approve the transaction because the affirmative vote by        
holders of a majority of the outstanding BioMarin common stock, present or      
represented at the annual meeting of BioMarin's stockholders, is required to    
approve the transaction including, without limitation, the issuance of shares   
of BioMarin common stock in connection with the transaction.                    

Share Ownership of Directors and Executive Officers of Glyko                    

As of the close of business on July 4, 2002, directors and executive      
officers of Glyko (and their respective associates) collectively owned or       
exercised direction or control over less than 1% of the Glyko common shares     
entitled to vote at the Glyko special meeting, exclusive of options to purchase 
Glyko common shares also held by these directors and executive officers. These  
directors and executive officers includes Erich Sager who owns or controls, in  
aggregate, approximately 21.6% of the issued and outstanding shares of BioMarin 
common stock as of June 27, 2002. Other than Messrs. Erich Sager, Gwynn         
Williams, Christopher Starr and Emil Kakkis, BioMarin and its affiliates do not 
currently own any Glyko common shares. The vote required for approval of the    
Glyko arrangement resolution and the Glyko continuance resolution at the Glyko  
special meeting is not less than two-thirds of the votes cast at the special    
meeting by holders of Glyko common shares. Shareholders representing            
approximately 27.3% of the Glyko common shares (including all of the directors  
of Glyko who are shareholders) have agreed with BioMarin, subject to certain    
conditions, to vote their shares in favor of the Glyko arrangement resolution   
and the Glyko continuance resolution. As a result, depending on the number of   
shares represented at the meeting, these shareholders of Glyko may be able to   
influence all matters requiring a shareholder vote in connection with the       
transaction.                                                                    

Court Approval of the Arrangement and Completion of the Transaction             

Under the Canada Business Corporations Act, the arrangement requires court
approval. Prior to the mailing of this Joint Proxy Circular, Glyko obtained an  
interim order from the Superior Court of Justice (Ontario) providing for the    
calling and holding of the Glyko special meeting and other procedural matters.  
A copy of each of the notice of application for an interim and final order and  
the interim order is attached hereto as Annex E.                                

Subject to the approval of the Glyko arrangement resolution and the Glyko 
continuance resolution by the Glyko shareholders at the Glyko special meeting   
and the approval of the arrangement, including the issuance of shares of        
BioMarin common stock, by the BioMarin stockholders at the BioMarin annual      
meeting, the hearing in                                                         

67  

DEFM14A
81st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 81st
respect of a final order is expected to take place on or about August 16, 2002  
at 10:00 a.m. (Toronto time) at the Toronto courthouse at 393 University        
Avenue, Toronto, Ontario.                                                       

Any Glyko securityholder who wishes to appear or be represented and to    
present evidence or arguments must serve and file a notice of appearance as set 
out in the notice of application for the final order and satisfy any other      
requirements of the court. The court will consider, among other things, the     
fairness and reasonableness of the arrangement. The court may approve the       
arrangement in any manner the court may direct, subject to compliance with such 
terms and conditions, if any, as the court deems fit.                           

Assuming the final order is granted and the other conditions to closing   
contained in the Acquisition Agreement are satisfied or waived, it is           
anticipated that the following will occur substantially simultaneously:         

.   articles of arrangement for Glyko will be filed with the Director under 
   the Canada Business Corporations Act to give effect to the arrangement;

.   articles of continuance of Glyko will be filed with the Registrar under 
     the Company Act (British Columbia) to give effect to the continuance; and

.   the various other documents necessary to consummate the transactions    
contemplated under the Acquisition Agreement will be executed and   
delivered.                                                          

Subject to the foregoing, it is expected that the effective time of the   
arrangement will occur as soon as practicable after the requisite BioMarin      
stockholder approval, Glyko shareholder approval and the final order have been  
obtained.                                                                       

Continuance                                                                     

Upon completion of the arrangement, Glyko will become an indirect,        
wholly-owned subsidiary of BioMarin. After the arrangement, BioMarin intends to 
exchange the 11,367,617 shares of BioMarin common stock owned by Glyko for      
Series A Preferred Stock of BioMarin, cancel such 11,367,617 shares of common   
stock and have Glyko remain as a non-operating, indirect subsidiary of          
BioMarin. The Series A Preferred Stock to be received by Glyko shall be         
redeemable, retractable, non-voting, non-convertible, and entitled to receive   
non-cumulative dividends as and when declared by the BioMarin board of          
directors at a rate of 5% per annum. The purpose for issuing shares of Series A 
Preferred Stock of BioMarin to Glyko is to "freeze" the value of the shares of  
BioMarin common stock held by Glyko, which would freeze the amount of the       
contingent tax liability arising from the difference between the value of the   
shares of BioMarin common stock owned by Glyko immediately before the exchange  
and the adjusted cost base of the shares of BioMarin common stock held by Glyko 
immediately before the exchange. Accordingly, future appreciation in the market 
value of BioMarin common stock would have no impact on the amount of the        
contingent tax liability. Although this contingent tax liability remains with   
Glyko after its acquisition by BioMarin, the realization of the liability       
should be able to be deferred indefinitely, and would only arise as a result of 
a deliberate action being taken by Glyko or indirectly BioMarin that            
constituted an actual or deemed disposition of the shares of Series A Preferred 
Stock of BioMarin to be issued to Glyko. See "Contingent Capital Gains Tax      
Liability to BioMarin."                                                         

The Canada Business Corporations Act, which governs Glyko, provides that, 
subject to certain exceptions, a corporation governed by the Canada Business    
Corporations Act shall not hold shares in its parent. Upon completion of the    
acquisition, Glyko will become an indirect wholly-owned subsidiary of BioMarin  
and, therefore, BioMarin will become Glyko's parent. As described under         
"--Contingent Capital Gains Tax Liability to BioMarin," Glyko would suffer      
adverse tax consequences if it was compelled to dispose of its holding of       
BioMarin stock. The Company Act (British Columbia) does not contain a           
prohibition similar to that contained in the Canada Business Corporations Act.  
As a result, at the Glyko special meeting the shareholders of Glyko will be     
asked to pass the continuance resolution authorizing the continuance of Glyko   
under the Company Act (British Columbia) to ensure that Glyko may continue to   
hold securities in BioMarin.                                                    

68  

DEFM14A
82nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 82nd
Accounting Treatment                                                            

  BioMarin will record the transaction based upon the fair value of the common
stock issued by BioMarin as of the date of closing. Following the transaction,  
BioMarin expects to exchange its shares of common stock currently owned by      
Glyko for shares of BioMarin preferred stock and to cancel such shares of       
common stock. Glyko's only significant asset is its investment in BioMarin.     
Because Glyko's investment in BioMarin will be held within a consolidated group 
and will not appear in the consolidated financial statements, no incremental    
consolidated assets or stockholders' equity will arise as a result of the       
transaction. The costs incurred by BioMarin and Glyko in effecting the          
transaction will be expensed as incurred.                                       

Contingent Capital Gains Tax Liability to BioMarin                              

Canada                                                                      

Without giving effect to the transactions described herein, upon a taxable
disposition by Glyko of the shares of BioMarin held by it, Glyko would realize  
a capital gain which would be subject to tax under Canadian federal and         
provincial income tax laws. Glyko's gain for Canadian federal and provincial    
income tax purposes would be equal to the difference between the fair market    
value of the BioMarin shares held by Glyko as of the date of disposition and    
the aggregate of Glyko's adjusted cost base of such shares and any reasonable   
costs of disposition. If Glyko disposed of these shares as of June 28, 2002,    
based upon the per share closing price of BioMarin's common stock as of such    
date (as reported on the Nasdaq), the gain would be approximately $32 million,  
as calculated by BioMarin. Under current Canadian federal and provincial income 
tax laws, Glyko would be obligated to pay Canadian federal and provincial       
income tax at a combined rate of approximately 19% of the capital gain (subject 
to the deduction of any available losses in accordance with Canadian income tax 
laws).                                                                          

Upon completion of the transactions described herein, BioMarin will hold  
indirectly all of the shares of BioMarin held by Glyko. Upon a taxable          
disposition of such shares as described below, Glyko would realize a gain which 
would be subject to capital gains tax under Canadian federal and provincial     
income tax laws. Glyko's gain for Canadian tax purposes would be equal to the   
difference between the fair market value of the BioMarin shares held by Glyko   
as of the date of disposition and the aggregate of Glyko's adjusted cost base   
of such shares and any reasonable costs of disposition.                         

In the future, if BioMarin remains a "foreign affiliate" of Glyko, and    
BioMarin generates sufficient after-tax net earnings, the contingent capital    
gains tax liability under Canadian federal and provincial income tax laws may   
be limited or eliminated in certain circumstances based on an election provided 
in the Income Tax Act (Canada). Under this election, a gain realized by Glyko   
from the disposition of BioMarin shares may be recharacterized as a dividend    
out of "exempt surplus" which would generally be tax free to Glyko, subject to  
the detailed rules in the Income Tax Act (Canada) in this regard. In addition,  
the events which would trigger the recognition of gain by Glyko are completely  
within the discretion and control of Glyko and indirectly BioMarin, and neither 
BioMarin nor Glyko has any intention of implementing or effecting any of these  
events.                                                                         

United States                                                               

BioMarin may be subject to United States federal income tax upon the      
liquidation or deemed liquidation of the shares of BioMarin held by Glyko.      
However the timing and amount of the gain subject to tax would vary based on    
the specific facts surrounding the liquidation or deemed liquidation event.     

The events which would trigger the recognition of gain by BioMarin are    
completely within the discretion and control of BioMarin, and BioMarin has no   
intention of implementing or effecting any of these events. The events which    
would trigger recognition of the United States tax include: (i) Glyko disposes  
or is deemed to dispose of the shares of BioMarin held by it; (ii) BioMarin     
Nova Scotia (if BioMarin Nova Scotia owns the shares of BioMarin common stock   
directly at the time it emigrates) or Glyko emigrates from Canada to another    
jurisdiction; (iii) BioMarin Nova Scotia pays a dividend in kind of the shares  
to BioMarin or its subsidiaries (if                                             

69  

DEFM14A
83rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 83rd
BioMarin Nova Scotia owns the shares of BioMarin common stock directly at the   
time of the distribution); or (iv) Glyko is merged or consolidated with         
BioMarin Nova Scotia and/or BioMarin. The events which may trigger recognition  
of a United States tax include the circumstances in which Glyko disposes or is  
deemed to dispose of the shares of BioMarin held by it (including upon a        
dissolution of Glyko).                                                          

Stock Exchange Listings                                                         

A condition to the closing of the arrangement is the filing of an         
application for the listing of additional shares with Nasdaq regarding the      
shares of BioMarin common stock to be issued pursuant to the transaction to     
Glyko shareholders. The shares of BioMarin common stock to be issued under the  
transaction will also be listed on the Swiss SWX New Market as promptly as      
possible following completion of the transaction.                               

The BioMarin common stock is quoted on Nasdaq and listed on the Swiss SWX 
New Market under the symbol "BMRN."                                             

Regulatory Matters                                                              

  Except as described in this Joint Proxy Circular, neither BioMarin nor Glyko
is aware of any material approval or other action by any federal, provincial,   
state or foreign government or any administrative or regulatory agency that     
would be required to be obtained prior to completion of the transaction.        

Ontario Securities Commission Rule 61-501                                   

The indirect acquisition by BioMarin of all of the issued shares of Glyko 
may be a "related party transaction" within the meaning of Ontario Securities   
Commission Rule 61-501--Insider Bids, Issuer Bids, Going Private Transactions   
and Related Party Transactions. Rule 61-501 provides that, unless not           
applicable or exempted, a corporation proposing to carry out a related party    
transaction is required to prepare a valuation of the affected securities and   
provide to the holders of such securities a summary of such valuation. Rule     
61-501 also requires that, in addition to any other required securityholder     
approval, the approval of a simple majority of the votes cast by "minority" (or 
disinterested) shareholders of the affected securities must be obtained. Glyko  
believes that in the circumstances of this transaction, there are no Glyko      
shareholders who have interests in the transaction which are different from     
other Glyko shareholders. In addition, these requirements do not apply to a     
related party transaction if persons or companies who are resident in Ontario   
and who beneficially own affected securities do not beneficially own more than  
two percent of such securities. Glyko believes that these valuation and         
approval requirements do not apply to this transaction.                         

United States Antitrust Laws                                                

It is possible that a person, including any state or private person, could
take action under applicable U.S. antitrust laws, including seeking to enjoin   
the transaction or seeking divestiture by BioMarin or Glyko. There can be no    
assurance that a challenge to the transaction will not be made or that, if a    
challenge is made, BioMarin and Glyko will prevail or would not be required to  
accept certain conditions, possibly including certain divestitures, in order to 
consummate the transaction.                                                     

Exemption from Registration Requirements of Securities Laws and Limitations on  
Resale of BioMarin Common Stock                                                 

Canada                                                                      

The shares of BioMarin common stock to be distributed to the Glyko        
shareholders pursuant to the arrangement will be distributed in reliance on     
exemptions from registration and prospectus requirements of applicable Canadian 
securities laws. To the extent determined necessary by Canadian counsel to      
Glyko and                                                                       

70  

DEFM14A
84th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 84th
BioMarin, discretionary exemptions will also be sought in certain provinces to  
permit the resale of the shares of BioMarin common stock to be issued in        
connection with the arrangement without restriction by persons other than a     
"control person," provided that no unusual effort is made to prepare the market 
for any such resale or to create a demand for the securities which are the      
subject of any such resale and no extraordinary commission or consideration is  
paid in respect of the resale. A condition of completing the arrangement is     
that all necessary discretionary exemptions will have been obtained with        
conditions that are satisfactory to Glyko and BioMarin.                         

United States                                                               

The issuance of the shares of BioMarin common stock to holders of Glyko   
common shares and replacement options to holders of Glyko options will not be   
registered under the United States Securities Act of 1933 or the securities     
laws of any state of the United States and will be issued in reliance upon the  
exemption available pursuant to Section 3(a)(10) of the United States           
Securities Act of 1933 and the exemptions provided under the securities laws of 
each state of the United States. Section 3(a)(10) exempts securities issued in  
exchange for one or more outstanding securities from the general requirement of 
registration where the terms and conditions of the issuance and exchange of     
such securities have been approved by any governmental authority having         
appropriate authority, including a court of competent jurisdiction, after a     
hearing upon the fairness of the terms and conditions of the issuance and       
exchange at which all persons to whom such securities will be issued have the   
right to appear. The Court is authorized to conduct a hearing to determine the  
fairness of the terms and conditions of the arrangement, including the proposed 
issuance of BioMarin securities in exchange for outstanding Glyko securities.   
The Court entered the interim order on July 2, 2002 and subject to the approval 
of the arrangement by the Glyko shareholders and the BioMarin stockholders, a   
hearing on the fairness of the arrangement is expected to be held on or about   
August 16, 2002 by the Court. See "--Court Approval of the Arrangement and      
Completion of the Transaction."                                                 

  The shares of BioMarin common stock received by any Glyko shareholder who is
an "affiliate" of either Glyko or BioMarin prior to the arrangement or will be  
an "affiliate" of BioMarin after the arrangement will be subject to certain     
restrictions on resale imposed by the United States Securities Act of 1933. As  
defined in Rule 144 under the United States Securities Act of 1933, an          
"affiliate" of an issuer for the purposes of the United States Securities Act   
of 1933 is a person that directly or indirectly, through one or more            
intermediaries, controls, or is controlled by, or is under common control with, 
such issuer.                                                                    

The shares of BioMarin common stock issued to Glyko shareholders may be   
resold by affiliates and non-affiliates as follows:                             

.   Persons who are not affiliates of Glyko or BioMarin prior to the        
arrangement and who will not be affiliates of BioMarin after the    
arrangement may resell their shares of BioMarin common stock in the 
    United States without restriction under the United States Securities Act
of 1933.                                                            

.   Persons who are affiliates of either Glyko or BioMarin prior to the     
    arrangement and who will be affiliates of BioMarin after the arrangement
  may not resell their shares of BioMarin common stock in the absence of
  registration under the United States Securities Act of 1933, unless an
     exemption from registration is available, such as the exemption contained
    in Rule 145(d) under the United States Securities Act of 1933, or unless
    registration is not required pursuant to the exclusion from registration
    provided by Regulation S under the United States Securities Act of 1933.
 In general, under Rule 145(d) as currently in effect, persons who are
affiliates of either Glyko or BioMarin prior to the arrangement and 
   persons who will be an affiliate of BioMarin after the arrangement will
    be entitled to resell in the United States during any three-month period
   that number of shares of BioMarin common stock that does not exceed the
  greater of 1% of the then outstanding securities of such class and the
 average weekly trading volume of such securities on Nasdaq during the
four-week period preceding the date of sale, subject to certain     
  restrictions on manner of sale, notice requirements, aggregation rules
and the availability of public information about BioMarin.          

71  

DEFM14A
85th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 85th
.   Persons who are affiliates of Glyko or BioMarin prior to the arrangement
     but who will not be affiliates of BioMarin after the arrangement, and who
     hold their shares of BioMarin common stock for a period of one year after
     the arrangement, may resell their shares of BioMarin common stock without
regard to the volume and manner of sale limitations set forth in the
preceding paragraph, subject to the availability of certain public  
information about BioMarin. Persons who are affiliates of Glyko or  
BioMarin prior to the arrangement who hold their shares of BioMarin 
   common stock for a period of two years after the arrangement may freely
  resell shares of BioMarin common stock provided that such persons have
     not been an affiliate of BioMarin during the three-month period preceding
the resale.                                                         

As a condition to closing the transaction, Glyko and BioMarin will enter  
into agreements with certain affiliates of Glyko, pursuant to which such        
affiliates agree not to sell, pledge or otherwise dispose of any shares of      
BioMarin common stock unless: (i) such transaction is permitted under Rule 145  
under the United States  Securities Act of 1933; (ii) such transaction is made  
pursuant to an effective registration statement under the United States         
Securities Act of 1933, or (iii) such transaction is made pursuant to an        
exemption from registration under the United States Securities Act of 1933.     

Shares of BioMarin common stock issuable upon exercise of replacement     
options issued by BioMarin in connection with the transaction will be issued    
pursuant to BioMarin's 1997 Stock Plan, as amended. The shares of BioMarin      
common stock issuable upon the exercise of such replacement options will be     
registered pursuant to an effective registration statement on Form S-8. Persons 
who acquire such shares upon the exercise of such replacement options, who are  
not otherwise affiliates of BioMarin, may resell their shares without           
restriction under the United States Securities Act of 1933.                     

 The foregoing discussion is only a general overview of certain requirements
of United States securities laws applicable to the securities received upon     
completion of the transaction. All holders of securities received in connection 
with the transaction are urged to consult with counsel to ensure that the       
resale of their securities complies with applicable securities regulation.      

Delisting and Deregistration of Glyko Common Shares After the Transaction       

When the transaction is completed such that all holders of Glyko shares   
(other than those that have exercised dissent rights) have exchanged their      
shares for shares of BioMarin common stock, Glyko common shares will be         
delisted from the Toronto Stock Exchange and will be deregistered under the     
United States Securities Exchange Act of 1934.                                  

Termination of Ongoing Reporting Obligations                                    

Upon completion of the arrangement, Glyko will be an indirect wholly-owned
subsidiary of BioMarin. Accordingly, after the implementation date of the       
arrangement, Glyko will apply to the appropriate securities regulatory          
authorities in Canada and in the United States to cease to be a reporting       
issuer, so as to no longer be subject to statutory financial and reporting      
requirements under applicable securities laws in Canada and the United States.  

Upon completion of the arrangement, it is not expected that BioMarin will 
become a reporting issuer in any of the Canadian provinces.                     

Other Agreements                                                                

BioMarin has entered into agreements with certain shareholders of Glyko   
(including all directors who are shareholders), representing in the aggregate   
approximately 27.3% of the outstanding Glyko common shares, pursuant to which   
each such shareholder has agreed: (i) to vote the Glyko common shares held by   
such shareholder in favor of the arrangement and the transactions contemplated  
thereby; and (ii) to vote the Glyko                                             

72  

DEFM14A
86th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 86th
common shares held by such shareholder against (1) any Acquisition Proposal     
(other than a Superior Offer), (2) any reorganization, recapitalization,        
dissolution, liquidation or winding up of Glyko, and (3) any amendment to the   
articles of incorporation or bylaws of Glyko which would prevent, impede,       
interfere with or delay the arrangement; (iii) to waive any rights of appraisal 
or rights to dissent from the arrangement that such shareholder may have; (iv)  
to not deposit or tender or agree to deposit or tender any of the Glyko common  
shares held by such shareholder to any take-over bid, stock exchange take-over  
bid or other purchase or acquisition of equity securities which is or is part   
of an Acquisition Proposal (other than a Superior Offer); (v) to not make, aid  
or abet, directly or indirectly, any "solicitation" of "proxies" (as such terms 
are used in the Canada Business Corporations Act) in respect of any Acquisition 
Proposal; (vi) to not initiate, propose or otherwise solicit shareholders of    
Glyko for the approval of one or more shareholder proposals with respect to     
Glyko as described in Section 99 of the Canada Business Corporations Act, or    
induce or attempt to induce any other person or entity to initiate any          
shareholder proposal with respect to Glyko, which in either case is contrary to 
or inconsistent with the terms of the arrangement; (vii) to not call or seek to 
have called any meeting of the shareholders of Glyko for any purpose which is   
contrary to or inconsistent with the terms of the arrangement; and (viii) to    
immediately notify BioMarin, at first orally and then in writing, of any        
agreement that such shareholder has entered into to sell, transfer, pledge,     
create an encumbrance on, or otherwise convey any of the Glyko common shares    
held by such shareholder or any interest therein to any person or entity.       

Under the terms of the Acquisition Agreement, a Superior Offer is an      
unsolicited, bona fide written offer made by a third party (other than BioMarin 
or its affiliates) which, if consummated, would result in such third party      
acquiring, directly or indirectly, securities representing more than 50% of the 
voting power of the shares of Glyko or the resulting entity of such transaction 
or all or substantially all of the assets of Glyko, in each case on terms which 
the board of directors of Glyko reasonably determines (following receipt of     
advice from its financial advisors of nationally recognized reputation and      
outside counsel) to be more favorable to Glyko's shareholders than the terms of 
the arrangement.                                                                

Expenses                                                                        

The combined estimated fees, costs and expenses of BioMarin and Glyko in  
connection with the transaction of approximately $3.7 million include, without  
limitation, financial advisors' fees of approximately $1.3 million, legal and   
accounting fees of approximately $2.0 million, and soliciting fees, printing,   
mailing and other costs related to the stockholders' meetings of approximately  
$300,000 and filing fees of approximately $19,000.                              

73  

DEFM14A
87th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 87th
REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES  

Except as otherwise expressly noted, the financial information regarding  
Glyko and the summaries thereof contained in this Joint Proxy Circular are      
reported in U.S. dollars and have been prepared in accordance with Canadian     
generally accepted accounting principles, or Canadian GAAP. Glyko audited       
financial statements on Annex J have been prepared in accordance with Canadian  
GAAP. Glyko audited financial statements on Annex K have been prepared in       
accordance with United States GAAP.                                             

 The consolidated financial statements, the pro forma consolidated financial
statements, and the summaries of historical consolidated financial information  
of BioMarin in this Joint Proxy Circular are reported in U.S. dollars and have  
been prepared in accordance with United States GAAP.                            

   UNLESS OTHERWISE INDICATED, ALL DOLLAR AMOUNTS ARE EXPRESSED IN U.S. DOLLARS.

74  

DEFM14A
88th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 88th
SELECTED CONSOLIDATED FINANCIAL DATA  

BioMarin Selected Consolidated Financial Data                                   

This section presents BioMarin's selected consolidated financial data. You
should carefully read the financial statements included in the reports          
incorporated by reference in this Joint Proxy Circular, including the notes to  
the financial statements included in those reports. The selected data in this   
section is not intended to replace the financial statements.                    

The consolidated statement of operations data for the years ended December
31, 1998, 1999, 2000, 2001 and 2002 and for the period from March 21, 1997      
(inception) to December 31, 1997, and the consolidated balance sheet data at    
December 31, 1997, 1998, 1999, 2000 and 2001, are derived from BioMarin's       
audited consolidated financial statements that have been prepared in accordance 
with accounting principles generally accepted in the United States of America   
(which differ in certain respects from accounting principles generally accepted 
in Canada). The consolidated statement of operations data for the three month   
periods ended March 31, 2001 and 2002 and the consolidated balance sheet data   
at March 31, 2002, are derived from BioMarin's unaudited consolidated financial 
statements. The unaudited consolidated financial statements include, in the     
opinion of management, all adjustments, consisting only of normal recurring     
adjustments, that management considers necessary for a fair statement of the    
results for those periods. Historical results are not indicative of results     
that BioMarin may expect in the future. The following data should be read in    
conjunction with BioMarin's consolidated financial statements and notes thereto 
and BioMarin's "Management's Discussion and Analysis of Financial Condition and 
Results of Operations" included elsewhere in this Joint Proxy Circular.         

                                                        [Enlarge/Download Table]

                                                 Period from                                                                
                                                March 21, 1997                                         Three Month Period   
                                                (inception) to         Year ended December 31,          ended March 31,     
                                                 December 31,  --------------------------------------  -------------------- 
                                                     1997        1998      1999      2000      2001      2001       2002    
                                                -------------- --------  --------  --------  --------   -------   --------  
                                                      (in thousands, except for per share data)        (in thousands, except
                                                                                                       for per share data,  
                                                                                                           unaudited)       
                                                                                                                            
Consolidated statement of operations                                                                                        
  data(1):                                                                                                                  
Revenues.......................................    $    --     $    854  $  5,300  $  9,714  $ 11,699  $ 2,690    $  3,792  
Operating costs and expenses:                                                                                               
    Research and development...................      1,914       10,288    26,341    34,459    45,283    9,657      13,218  
    General and administrative.................        914        3,146     4,757     6,507     6,718    1,474       3,926  
    In-process research and development........         --           --        --        --    11,647       --      11,223  
    Facility closure...........................         --           --        --     4,423        --       --          --  
                                                   -------     --------  --------  --------  --------   -------   --------  
       Total operating costs and expenses......      2,828       13,434    31,098    45,389    63,648   11,131      28,367  
                                                   -------     --------  --------  --------  --------   -------   --------  
Loss from operations...........................     (2,828)     (12,580)  (25,798)  (35,675)  (51,949)  (8,441)    (24,575) 
Interest income................................         65          685     1,832     2,979     1,871      468         380  
Interest expense...............................         --           --      (732)       (7)      (17)      (2)        (91) 
Equity in loss of joint venture................         --          (47)   (1,673)   (2,912)   (7,333)  (1,108)     (2,298) 
                                                   -------     --------  --------  --------  --------   -------   --------  
Net loss from continuing operations............     (2,763)     (11,942)  (26,371)  (35,615)  (57,428)  (9,083)    (26,584) 
Income (loss) from discontinued operations.....         --         (372)   (1,701)   (1,749)   (2,266)    (617)        122  
Loss from disposal of discontinued operations..         --           --        --        --    (7,912)      --        (141) 
                                                   -------     --------  --------  --------  --------   -------   --------  
Net loss.......................................    $(2,763)    $(12,314) $(28,072) $(37,364) $(67,606) $(9,700)   $(26,603) 
                                                   =======     ========  ========  ========  ========   =======   ========  
Net loss per share, basic and diluted:                                                                                      
Loss from continuing operations................    $ (0.34)    $  (0.53) $  (0.88) $  (0.99) $  (1.40) $ (0.24)   $  (0.51) 
                                                   =======     ========  ========  ========  ========   =======   ========  
Income (loss) from discontinued operations.....    $    --     $  (0.02) $  (0.06) $  (0.05) $  (0.06) $ (0.02)   $     --  
                                                   =======     ========  ========  ========  ========   =======   ========  
Loss from disposal of discontinued operations..    $    --     $     --  $     --  $     --  $  (0.19) $    --    $     --  
                                                   =======     ========  ========  ========  ========   =======   ========  
Net loss.......................................    $ (0.34)    $  (0.55) $  (0.94) $  (1.04) $  (1.65) $ (0.26)   $  (0.51) 
                                                   =======     ========  ========  ========  ========   =======   ========  
Weighted average common shares outstanding.....      8,136       22,488    29,944    35,859    41,083   37,052      52,535  
                                                   =======     ========  ========  ========  ========   =======   ========  

75  

DEFM14A
89th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 89th
                                                        [Enlarge/Download Table]

                                                    December 31,                             
                                      ----------------------------------------   March 31,   
                                       1997   1998     1999    2000     2001        2002     
                                      ------ ------- -------- ------- -------- --------------
                                                                               (in thousands,
                                                   (in thousands)                unaudited)  
                                                                                             
Consolidated balance sheet data:                                                             
Cash, cash equivalents and short-term                                                        
  investments........................ $6,888 $11,389 $ 62,986 $40,201 $131,097    $114,798   
Total current assets.................  7,507  12,819   66,422  44,541  136,783     123,426   
Total assets.........................  7,653  31,510  103,549  76,933  171,811     157,306   
Long-term liabilities................     --     110       85      56    3,961       3,503   
Total stockholders' equity...........  7,380  29,394   98,377  69,994  159,548     144,368   

--------                                                                        
(1)  See notes to BioMarin's consolidated financial statements for a            
description of the number of shares used in the computation of the net loss per 
common share.                                                                   

BioMarin Supplemental Financial Data                                            

This section presents BioMarin's unaudited supplemental financial data for
each of the nine quarterly periods ended March 31, 2002. You should carefully   
read the financial statements included in this Joint Proxy Circular, including  
the notes to the financial statements included in those reports. The            
supplemental financial data in this section is not intended to replace the      
financial statements.                                                           

                                                        [Enlarge/Download Table]

                                                      Three Month Period Ended       
                                               ------------------------------------- 
                                               Mar. 31,  June 30, Sept. 30, Dec. 31, 
                                                 2000      2000     2000      2000   
                                               --------  -------- --------- -------- 
                                                     (unaudited, in thousands,       
                                                     except for per share data)      
                                                                                     
Consolidated statements of operations data:                                          
Revenues...................................... $  2,791  $ 2,258   $ 1,950  $  2,715 
Operating costs and expenses:                                                        
   Research and development...................    8,178    7,417     8,253    10,611 
   General and administrative.................    1,621    1,797     1,527     1,562 
   Facility closure...........................    4,423       --        --        -- 
                                               --------  -------   -------  -------- 
       Total operating costs and expenses.....   14,222    9,214     9,780    12,173 
                                               --------  -------   -------  -------- 
Loss from operations..........................  (11,431)  (6,956)   (7,830)   (9,458)
Interest income...............................      788      802       691       698 
Interest expense..............................       (2)      (2)       (2)       (1)
Equity in loss of joint venture...............     (557)    (698)     (590)   (1,067)
                                               --------  -------   -------  -------- 
Loss from continuing operations...............  (11,202)  (6,854)   (7,731)   (9,828)
Loss from discontinued operations.............     (534)    (232)     (417)     (566)
                                               --------  -------   -------  -------- 
Net loss...................................... $(11,736) $(7,086)  $(8,148) $(10,394)
                                               ========  =======   =======  ======== 
Net loss per common share, basic and diluted:                                        
   Loss from continuing operations............ $  (0.32) $ (0.19)  $ (0.22) $  (0.26)
                                               ========  =======   =======  ======== 
   Loss from discontinued operations.......... $  (0.02) $ (0.01)  $ (0.01) $  (0.02)
                                               ========  =======   =======  ======== 
   Net loss................................... $  (0.34) $ (0.20)  $ (0.23) $  (0.28)
                                               ========  =======   =======  ======== 
Weighted average common shares outstanding....   35,015   35,397    36,064    36,888 
                                               ========  =======   =======  ======== 

76  

DEFM14A
90th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 90th
                                                        [Enlarge/Download Table]

                                                                 As at                
                                                  ------------------------------------
                                                  Mar. 31, June 30, Sept. 30, Dec. 31,
                                                    2000     2000     2000      2000  
                                                  -------- -------- --------- --------
                                                       (unaudited, in thousands)      
                                                                                      
Consolidated balance sheet data:                                                      
Cash, cash equivalents and short-term investments $55,674  $49,412   $47,505  $40,201 
Total current assets.............................  61,552   53,532    51,414   44,541 
Total assets.....................................  94,490   86,090    83,324   76,933 
Long-term liabilities............................      77       68        63       56 
Total stockholders' equity.......................  89,731   83,196    79,652   69,994 

                                                        [Enlarge/Download Table]

                                                                         Three Month Period Ended                
                                                             -----------------------------------------------     
                                                             Mar. 31,     June 30,  Sept. 30, Dec. 31,   Mar 31, 
                                                               2001         2001      2001      2001      2002   
                                                             --------     --------  --------- --------  -------- 
                                                             (unaudited, in thousands, except for per share data)
                                                                                                                 
Consolidated statements of operations data:                                                                      
Revenues.................................................... $ 2,690      $  3,012  $  3,101  $  2,896  $  3,792 
Operating costs and expenses:                                                                                    
   Research and development.................................   9,657        11,506    10,061    14,059    13,218 
   General and administrative...............................   1,474         1,536     2,340     1,368     3,926 
   In-process research and development......................      --            --        --    11,647    11,223 
                                                             -------      --------  --------  --------  -------- 
       Total operating costs and expenses...................  11,131        13,042    12,401    27,074    28,367 
                                                             -------      --------  --------  --------  -------- 
Loss from operations........................................  (8,441)      (10,030)   (9,300)  (24,178)  (24,575)
Interest income.............................................     468           436       530       437       380 
Interest expense............................................      (2)           (1)       (8)       (6)      (91)
Equity in loss of joint venture.............................  (1,108)       (1,736)   (1,864)   (2,625)   (2,298)
                                                             -------      --------  --------  --------  -------- 
Loss from continuing operations.............................  (9,083)      (11,331)  (10,642)  (26,372)  (26,584)
Income (loss) from discontinued operations..................    (617)         (638)     (373)     (638)      122 
Loss from disposal of discontinued operations...............      --            --        --    (7,912)     (141)
                                                             -------      --------  --------  --------  -------- 
Net loss.................................................... $(9,700)     $(11,969) $(11,015) $(34,922) $(26,603)
                                                             =======      ========  ========  ========  ======== 
Net loss per common share, basic and diluted:                                                                    
   Loss from continuing operations.......................... $ (0.25)     $  (0.29) $  (0.25) $  (0.58) $  (0.51)
                                                             =======      ========  ========  ========  ======== 
   Income (loss) from discontinued operations............... $ (0.01)     $  (0.01) $  (0.01) $  (0.01) $     -- 
                                                             =======      ========  ========  ========  ======== 
   Loss from disposal of discontinued operations............ $    --      $     --  $     --  $  (0.18) $     -- 
                                                             =======      ========  ========  ========  ======== 
   Net loss................................................. $ (0.26)     $  (0.30) $  (0.26) $  (0.77) $  (0.51)
                                                             =======      ========  ========  ========  ======== 
Weighted average common shares outstanding..................  37,052        39,587    42,136    45,515    52,535 
                                                             =======      ========  ========  ========  ======== 

                                                        [Enlarge/Download Table]

                                                                                 As at                    
                                                             ---------------------------------------------
                                                             Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31,
                                                               2001     2001     2001      2001     2002  
                                                             -------- -------- --------- -------- --------
                                                                       (unaudited, in thousands)          
                                                                                                          
Consolidated balance sheet data:                                                                          
Cash, cash equivalents and short-term investments........... $29,766  $59,885   $43,905  $131,097 $114,798
Total current assets........................................  35,861   63,586    50,642   136,783  123,426
Total assets................................................  65,443   98,321    90,402   171,811  157,306
Long-term liabilities.......................................      47      198       146     3,961    3,503
Total stockholders' equity..................................  61,759   93,000    84,166   159,548  144,368

77  

DEFM14A
91st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 91st
Glyko Selected Financial Data                                                   

The following table presents historical financial data for the periods    
indicated in U.S. dollars. The statement of operations data for the years ended 
December 31, 1999, 2000, 2001 and 2002 and the balance sheet data at December   
31, 2000 and 2001, are derived from Glyko's audited financial statements that   
have been prepared in accordance with accounting principles generally accepted  
in Canada. The statement of operations data for the three month periods ended   
March 31, 2001 and 2002 and the balance sheet data at March 31, 2002, are       
derived from Glyko's unaudited consolidated financial statements. The unaudited 
financial statements include, in the opinion of management, all adjustments,    
consisting only of normal recurring adjustments, that management considers      
necessary for a fair statement of the results for those periods. Historical     
results are not indicative of results that Glyko may expect in the future. The  
following data should be read in conjunction with Glyko's financial statements  
and notes thereto and Glyko's "Management's Discussion and Analysis of          
Financial Condition and Results of Operations" included elsewhere in this Joint 
Proxy Circular.                                                                 

  In order to comply with Canadian securities regulatory requirements, Glyko's
financial information has been prepared using Canadian GAAP, which differs in   
certain respects from United States GAAP.                                       

                                                        [Enlarge/Download Table]

                                                                                           Three Month Period   
                                                    Year Ended December 31,                  Ended March 31,    
                                                 ----------------------------------------  -------------------- 
                                                   1999          2000          2001          2001       2002    
                                                 --------      --------      --------      --------   --------  
                                                 (in thousands, except for per share data) (in thousands, except
                                                                                           for per share data,  
                                                                                               unaudited)       
                                                                                                                
Statements of operations data(1):                                                                               
Expenses:                                                                                                       
   General and administrative................... $    199      $    388      $    462      $     70   $    295  
                                                 --------      --------      --------      --------   --------  
       Total expenses...........................      199           388           462            70        295  
                                                 --------      --------      --------      --------   --------  
Loss from operations............................     (199)         (388)         (462)          (70)      (295) 
Equity in loss of BioMarinPharmaceutical Inc....  (10,173)      (11,934)      (18,904)       (3,092)    (3,268) 
Gain on reduction of share ownership of BioMarin                                                                
  Pharmaceutical Inc............................   26,814         1,424        30,515           377      2,472  
Interest income.................................      187           121           123            36          1  
                                                 --------      --------      --------      --------   --------  
Net income (loss)............................... $ 16,629      $(10,777)     $ 11,272      $ (2,749)  $ (1,090) 
                                                 ========      ========      ========      ========   ========  
Earnings (loss) per share--basic................ $   0.54      $  (0.32)     $   0.33      $  (0.08)  $  (0.03) 
                                                 ========      ========      ========      ========   ========  
Earnings (loss) per share--diluted.............. $   0.50      $  (0.32)     $   0.33      $  (0.08)  $  (0.03) 
                                                 ========      ========      ========      ========   ========  
Weighted average number of shares--basic........   31,066        33,915        34,353        34,353     34,353  
                                                 ========      ========      ========      ========   ========  
Weighted average number of shares--diluted......   33,568        33,915        34,372        34,353     34,353  
                                                 ========      ========      ========      ========   ========  

--------                                                                        
(1)  See notes to Glyko's financial statements for a description of the number  
of shares used in the computation of earnings per share.                        

78  

DEFM14A
92nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 92nd
Reconciliation of financial information prepared using Canadian GAAP to   
United States GAAP:                                                             

                                                        [Enlarge/Download Table]

                                                                                       Three Month Period
                                                            Year Ended December 31,     Ended March 31,  
                                                         ----------------------------  ----------------  
                                                           1999      2000      2001      2001      2002  
                                                         --------  --------  --------  -------   ------- 
                                                                (in thousands)          (in thousands,   
                                                                                          unaudited)     
                                                                                                         
Net income (loss) as shown above in Canadian GAAP....... $ 16,629  $(10,777) $ 11,272  $(2,749)  $(1,090)

Items having a positive effect on net income (loss):                                                     
   Amortization or write-off of BioMarin's goodwill not                                                  
     recognized under United States GAAP(1).............      674     1,065     7,005      349        -- 

Items having a negative effect on net income (loss):                                                     
   In-process research and development not recognized                                                    
     under Canadian GAAP(1).............................       --        --    (2,528)      --    (2,435)
   Deferred compensation amortization not recognized                                                     
     under Canadian GAAP(1).............................     (500)     (442)     (250)     (71)      (53)
   Interest income not recognized under United States                                                    
     GAAP...............................................      (29)      (57)      (79)     (17)       -- 
   Gain on reduction of share ownership of BioMarin                                                      
     included in additional paid in capital under                                                        
     United States GAAP.................................  (26,814)   (1,424)  (30,515)    (377)   (2,472)
                                                         --------  --------  --------  -------   ------- 
Net loss according to United States GAAP................ $(10,040) $(11,635) $(15,095) $(2,865)  $(6,050)
                                                         ========  ========  ========  =======   ======= 

--------                                                                        
(1) These amounts are recorded as Glyko's Equity in Loss of BioMarin.           

                                                                [Download Table]

                                                  As at December 31,     As at     
                                                  ------------------   March 31,   
                                                   2000      2001         2002     
                                                   -------  -------  --------------
                                                  (in thousands)     (in thousands,
                                                                       unaudited)  
                                                                                   
Balance sheet data:                                                                
Cash, cash equivalents and short-term investments $ 1,805   $ 2,444     $ 2,419    
Investment in BioMarin...........................  25,129    36,741      35,945    
Total assets.....................................  26,964    39,185      38,364    
Total shareholders' equity.......................  26,649    38,724      37,633    

79  

DEFM14A
93rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 93rd
Reconciliation of financial information prepared using Canadian GAAP to   
United States GAAP:                                                             

                                                        [Enlarge/Download Table]

                                                                          As at December 31,     As at     
                                                                          ----------------     March 31,   
                                                                            2000      2001        2002     
                                                                          -------   -------  --------------
                                                                           (in thousands)    (in thousands,
                                                                                               unaudited)  
                                                                                                           
Investment in BioMarin as shown above in Canadian GAAP................... $25,129   $36,741     $35,945    

   Impact of write-off of in-process research and development for                                          
     United States GAAP..................................................      --    (2,528)     (4,963)   
   Impact of Glyko Biomedical's disposal of Glyko, Inc. not included for                                   
     United States GAAP..................................................  (6,823)   (6,823)     (6,823)   
   Impact of amortization of deferred compensation for United States                                       
     GAAP................................................................  (1,024)   (1,274)     (1,326)   
   Impact of goodwill amortization and write-off not included for                                          
     United States GAAP..................................................   1,739     8,742       8,742    
                                                                          -------   -------     -------    
       Investment in BioMarin in United States GAAP...................... $19,021   $34,858     $31,575    
                                                                          =======   =======     =======    

Total assets as shown above in Canadian GAAP............................. $26,964   $39,185     $38,364    
   Impact of write-off of in-process research and development for                                          
     United States GAAP..................................................      --    (2,528)     (4,963)   
   Impact of Glyko Biomedical's disposal of Glyko, Inc. not included for                                   
     United States GAAP..................................................  (6,823)   (6,823)     (6,823)   
   Impact of amortization of deferred compensation for United States                                       
     GAAP................................................................  (1,024)   (1,274)     (1,326)   
   Impact of goodwill amortization and write-off not included for                                          
     United States GAAP..................................................   1,739     8,742       8,742    
                                                                          -------   -------     -------    
       Total assets in United States GAAP................................ $20,856   $37,302     $33,994    
                                                                          =======   =======     =======    

Total shareholders' equity as shown above in Canadian GAAP............... $26,649   $38,724     $37,633    
   Impact of write-off of in-process research and development for                                          
     United States GAAP..................................................      --    (2,528)     (4,963)   
   Impact of Glyko Biomedical's disposal of Glyko, Inc. not included for                                   
     United States GAAP..................................................  (6,823)   (6,823)     (6,823)   
   Impact of amortization of deferred compensation for United States                                       
     GAAP................................................................  (1,024)   (1,274)     (1,326)   
   Impact of goodwill amortization and write-off not included for                                          
     United States GAAP..................................................   1,739     8,742       8,742    
   Other.................................................................      (1)       --          --    
                                                                          -------   -------     -------    
       Total shareholders' equity in United States GAAP.................. $20,540   $36,841     $33,263    
                                                                          =======   =======     =======    

80  

DEFM14A
94th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 94th
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS 

The following unaudited pro forma consolidated financial statements are   
presented for illustrative purposes only and are not necessarily indicative of  
the combined results of operations of the consolidated company. The unaudited   
pro forma consolidated financial statements have been prepared from the         
historical financial statements of Glyko and BioMarin as at March 31, 2002, for 
the year ended December 31, 2001 and for the three month period ended March 31, 
2002. The unaudited pro forma consolidated balance sheet assumes the            
transaction had been consummated on March 31, 2002. The unaudited pro forma     
consolidated statements of operations for the three month period ended March    
31, 2002 and for the year ended December 31, 2001 assume that the transaction   
had been consummated on January 1, 2001. These unaudited pro forma consolidated 
financial statements should be read in conjunction with the historical          
consolidated financial statements of BioMarin and Glyko, including the notes    
thereto, included in Annexes I and J, respectively. The unaudited pro forma     
consolidated financial statements are presented in accordance with United       
States GAAP, which differs in certain respects from Canadian GAAP. All figures  
are in U.S. dollars.                                                            

BioMarin Pharmaceutical Inc.  

Unaudited Pro Forma Consolidated Balance Sheet (United States GAAP) 

at March 31, 2002 
(in thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                                               Pro Forma  Adjustments                              
                                                             ----------------------                                
                                                                                                         BioMarin  
                                                                                        Intercompany    Pro Forma  
                                         BioMarin    Glyko    Additions  Subtractions   Eliminations   Consolidated
                                        ---------  --------  ---------   ------------   ------------   ------------
                                                                                                                   
Assets:                                                                                                            
    Current assets..................... $ 123,426  $  2,419  $     --      $ (3,700)(a)   $     --      $ 122,145  
    Investment in BioMarin.............        --    31,575                                (31,575)(d)         --  
    Investment in Glyko................        --        --   61,558 (b)                   (61,558)(d)         --  
    Other long-term assets.............    33,880        --                                                33,880  
                                        ---------  --------  --------      --------       --------      ---------  
       Total assets.................... $ 157,306  $ 33,994  $ 61,558      $ (3,700)      $(93,133)     $ 156,025  
                                        =========  ========  ========      ========       ========      =========  
       Total liabilities............... $  12,938  $    731  $     --      $ (1,000)(a)   $     --      $  12,669  
                                        ---------  --------  --------      --------       --------      ---------  
Stockholders' equity:                                                                                              
    Common stock.......................        53    22,535       11 (b)        (11)(c)    (22,535)(d)         53  
    Preferred stock....................        --        --   61,558 (c)                   (61,558)(d)         --  
    Additional paid in capital.........   316,469    72,627   61,547 (b)    (61,547)(c)    (72,627)(d)    316,469  
    Warrants...........................     5,219        --                                                 5,219  
    Deferred compensation..............      (490)       --                                                  (490) 
    Stockholder notes..................    (2,087)       --                                                (2,087) 
    Foreign currency translation.......       (74)       --                                                   (74) 
    Retained deficit...................  (174,722)  (61,899)                 (2,700)(a)     63,587 (d)   (175,734) 
                                        ---------  --------  --------      --------       --------      ---------  
       Total stockholders' equity......   144,368    33,263   123,116       (64,258)       (93,133)       143,356  
                                        ---------  --------  --------      --------       --------      ---------  
       Total liabilities and                                                                                       
        stockholders' equity........... $ 157,306  $ 33,994  $123,116      $(65,258)      $(93,133)     $ 156,025  
                                        =========  ========  ========      ========       ========      =========  

81  

DEFM14A
95th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 95th
BioMarin Pharmaceutical Inc.  

Unaudited Pro Forma Consolidated Statement of Operations (United States GAAP) 

For The Year Ended December 31, 2001  
(in thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                               Historical                                                                 
                                                  IBEX                                                                    
                               Historical     (1/1/01-date    Historical                     Pro Forma                    
                                BioMarin           of           Synapse       Pro Forma      Subtotal    Historical Glyko 
                            (1/1/01-12/31/01) acquisition) (1/1/01-12/31/01) Adjustments   Without Glyko (1/1/01-12/31/01)
                            ----------------- ------------ ----------------- -----------   ------------- -----------------
                                                                                                                          
Revenues...................     $ 11,699                                                     $ 11,699        $     --     
                                --------                                                     --------        --------     
Operating cost and                                                                                                        
 expenses:                                                                                                                
   Research and                                                                                                           
    development............       45,283          656(f)         3,366(j)                      49,305              --     
   General and                                                                                                            
    administrative.........        6,718          667(f)                                        7,385             462     
   In-process research                                                                                                    
    and development........       11,647                                       (11,647)(g)         --              --     
                                --------                                                     --------        --------     
     Total costs and                                                                                                      
       expenses............       63,648                                                       56,690             462     
                                --------                                                     --------        --------     
Loss from operations.......      (51,949)                                                     (44,991)           (462)    
Interest income............        1,871                                                        1,871              45     
Interest expense...........          (17)                                                         (17)             --     
Equity in loss of                                                                                                         
 BioMarin..................           --                                                           --         (14,678)    
Equity in loss of joint                                                                                                   
 venture...................       (7,333)                                                      (7,333)             --     
                                --------                                                     --------        --------     
Loss from continuing                                                                                                      
 operations................     $(57,428)                                                    $(50,470)       $(15,095)    
                                ========                                                     ========        ========     
Net loss from continuing                                                                                                  
 operations per common                                                                                                    
 share, basic and diluted..     $  (1.40)                                                    $  (1.18)       $  (0.44)    
                                ========                                                     ========        ========     
Weighted average shares                                                                                                   
 outstanding...............       41,083          679(k)           885(l)                      42,647          34,353     
                                ========                                                     ========        ========     
                                                                [Download Table]


                             Pro Forma  Pro Forma
                            Adjustments   Total  
                            ----------- ---------
                                                 
Revenues...................             $ 11,699 
                                        -------- 
Operating cost and                               
 expenses:                                       
   Research and                                  
    development............               49,305 
   General and                                   
    administrative.........                7,847 
   In-process research                           
    and development........                   -- 
                                        -------- 
     Total costs and                             
       expenses............               57,152 
                                        -------- 
Loss from operations.......              (45,453)
Interest income............                1,916 
Interest expense...........                  (17)
Equity in loss of                                
 BioMarin..................   14,678(e)       -- 
Equity in loss of joint                          
 venture...................               (7,333)
                                        -------- 
Loss from continuing                             
 operations................             $(50,887)
                                        ======== 
Net loss from continuing                         
 operations per common                           
 share, basic and diluted..             $  (1.19)
                                        ======== 
Weighted average shares                          
 outstanding...............               42,647 
                                        ======== 

82  

DEFM14A
96th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 96th
BioMarin Pharmaceutical Inc.  

Unaudited Pro Forma Consolidated Statement of Operations (United States GAAP) 

For The Three Month Period Ended March 31, 2002 
(in thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                                      Historical                                                          
                                                       Synapse                                                            
                                       Historical      (1/1/02-                   Pro Forma      Historical               
                                        BioMarin       date of     Pro Forma      Subtotal         Glyko        Pro Forma 
                                    (1/1/02-3/31/02) acquisition) Adjustments   Without Glyko (1/1/02-3/31/02) Adjustments
                                    ---------------- ------------ -----------   ------------- ---------------- -----------
                                                                                                                          
Revenues...........................     $  3,792                                  $  3,792        $    --                 
                                        --------                                  --------        -------                 
Operating cost and expenses:                                                                                              
   Research and development........       13,218         488(j)                     13,706             --                 
   General and administrative......        3,926                     (1,000)(i)      2,926            295                 
   In-process research and                                                                                                
    development....................       11,223                    (11,223)(h)         --             --                 
                                        --------                                  --------        -------                 
      Total costs and                                                                                                     
       expenses....................       28,367                                    16,632            295                 
                                        --------                                  --------        -------                 
Loss from operations...............      (24,575)                                  (12,840)          (295)                
Interest income....................          380                                       380              1                 
Interest expense...................          (91)                                      (91)            --                 
Equity in loss of BioMarin.........           --                                        --         (5,755)        5,755(e)
Equity in loss of joint venture....       (2,298)                                   (2,298)            --                 
                                        --------                                  --------        -------                 
Loss from continuing operations....     $(26,584)                                 $(14,849)       $(6,049)                
                                        ========                                  ========        =======                 
Net loss from continuing operations                                                                                       
 per common share, basic and                                                                                              
 diluted...........................     $  (0.51)                                 $  (0.28)       $ (0.18)                
                                        ========                                  ========        =======                 
Weighted average shares                                                                                                   
 outstanding.......................       52,535         787(l)                     53,322         34,353                 
                                        ========                                  ========        =======                 
                                                                [Download Table]


                                    Pro Forma
                                      Total  
                                    ---------
                                             
Revenues........................... $  3,792 
                                    -------- 
Operating cost and expenses:                 
   Research and development........   13,706 
   General and administrative......    3,221 
   In-process research and                   
    development....................       -- 
                                    -------- 
      Total costs and                        
       expenses....................   16,927 
                                    -------- 
Loss from operations...............  (13,135)
Interest income....................      381 
Interest expense...................      (91)
Equity in loss of BioMarin.........       -- 
Equity in loss of joint venture....   (2,298)
                                    -------- 
Loss from continuing operations.... $(15,143)
                                    ======== 
Net loss from continuing operations          
 per common share, basic and                 
 diluted........................... $  (0.28)
                                    ======== 
Weighted average shares                      
 outstanding.......................   53,322 
                                    ======== 

83  

DEFM14A
97th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 97th
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS  

1.  Basis of Presentation                                                       

The unaudited pro forma consolidated financial statements are presented to
give effect to:                                                                 

.   the acquisition of Glyko by BioMarin;                                   
.   the acquisition by BioMarin of certain assets of IBEX Therapeutics      
(IBEX), and                                                         
.   the acquisition by BioMarin of Synapse Technologies Inc.                

  The unaudited pro forma consolidated financial statements have been prepared
from the historical financial statements of Glyko (see Note 2 below) and        
BioMarin as at March 31, 2002, for the three months in the period then ended    
and for the year ended December 31, 2001. The unaudited pro forma balance sheet 
assumes the transactions had been consummated on March 31, 2002. The pro forma  
statement of operations for each of the periods presented assumes that all      
transactions had been consummated on January 1, 2001.                           

  The unaudited pro forma consolidated financial statements do not reflect any
cost savings or other synergies which may result from the transaction and are   
not necessarily indicative of future results of operations or financial         
position.                                                                       

  These unaudited pro forma consolidated financial statements are presented in
accordance with U.S. GAAP. Accounting policies used in the preparation of the   
unaudited pro forma consolidated financial statements are in accordance with    
those used in the preparation of the historical consolidated financial          
statements of BioMarin as at December 31, 2001 and for the year then ended. The 
unaudited pro forma consolidated financial statements should be read in         
conjunction with the historical consolidated financial statements of BioMarin   
and Glyko, including the notes thereto, included in Annexes I and J,            
respectively.                                                                   

2.  Conversion of Glyko to U. S. GAAP                                           

The historical consolidated financial statements of BioMarin (included in 
Annex I) have been prepared using U.S. GAAP and the historical financial        
statements of Glyko have been prepared using Canadian GAAP (included in Annex   
J) and U.S. GAAP (included in Annex K). The primary differences between U.S.    
GAAP and Canadian GAAP are: (i) the way in which Glyko's equity in loss of      
BioMarin is calculated and presented in the income statement; and (ii) that     
Glyko reflects its gain on reduction of share ownership of BioMarin as an       
income statement item under Canadian GAAP, and as a paid-in capital under U.S.  
GAAP.                                                                           

3.  Pro Forma Adjustments and Certain Non-Recurring Charges not Included        

(a) Reflects the estimated costs associated with the transaction of $3.7  
million. At March 31, 2002, $1.0 million of these costs had been  
incurred but not paid. Such costs will be charged to operations as
incurred. These costs have been excluded from loss from continuing
       operations for all periods presented as they are non-recurring in nature.

(b) Records BioMarin's investment in Glyko at the fair value of the common
stock to be issued by BioMarin. The fair value will ultimately be 
determined based on the fair value of BioMarin's stock as of the  
      transaction date. For purposes of this presentation, the amount is based
on the per share price of BioMarin common stock at May 10, 2002   
multiplied by the 11,367,617 shares to be issued by BioMarin.     

The effect of the stock options that BioMarin will issue in the   
      transaction is not expected to be material and is not reflected in these
pro forma statements.                                             

  (c) Reflects BioMarin's issuance of preferred stock to Glyko in exchange for
      the BioMarin common stock owned by Glyko (11,367,617 shares at March 31,
2002). Also reflects the cancellation of the BioMarin common stock
received by BioMarin from Glyko.                                  

84  

DEFM14A
98th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 98th
(d) Eliminates intercompany holdings in consolidation.                    

(e) Reverses Glyko's equity in loss of BioMarin that would eliminate in   
consolidation.                                                    

(f) Reflects research and development and general and administrative      
expenses of IBEX therapeutics business incurred during 2001.      

(g) BioMarin incurred an in process research and development charge of    
    approximately $11.6 million in connection with the acquisition of IBEX
  therapeutic assets. This amount has been excluded from the pro-forma
presentation as it is non-recurring.                              

(h) BioMarin incurred an in-process research and development charge of    
approximately $11.2 million in connection with the acquisition of 
    Synapse. This amount has been excluded from the pro forma presentation
as it is non-recurring.                                           

 (i) Reflects the portion of the $3.7 million in estimated transaction costs
  incurred for the three months ended March 31, 2002. These costs have
been excluded as they are non-recurring in nature.                

(j) Reflects research and development expenses of Synapse incurred during 
2001 and the first quarter of 2002.                               

(k) Reflects the number of shares issued in connection with the IBEX      
  transaction as if the transaction had been consummated on January 1,
2001.                                                             

(l) Reflects the number of shares issued in connection with the Synapse   
  transaction as if the transaction had been consummated on January 1,
2001.                                                             

4.  Reconciliation of BioMarin Stockholders' Equity                             

The following table reconciles stockholders' equity of BioMarin:          

                                                                [Download Table]

                                                                      (in thousands)
                                                                                    
Balance at March 31, 2002 (unaudited)................................    $144,368   
   Net assets of Glyko acquired......................................       1,688   
   Transaction costs.................................................      (2,700)  
   Issuance of BioMarin common stock to Glyko shareholders...........      61,558   
   Cancellation of shares of BioMarin owned by Glyko.................     (61,558)  
   Issuance of shares of BioMarin Series A Preferred Stock to Glyko..      61,558   
   Elimination of Series A Preferred Stock upon consolidation........     (61,558)  
                                                                         --------   
Pro Forma Consolidated Balance at March 31, 2002 (unaudited).........    $143,356   
                                                                         ========   

85  

DEFM14A
99th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 99th
PRO FORMA CAPITALIZATION OF BIOMARIN  

  The following table sets forth: (i) the actual capitalization of BioMarin as
at March 31, 2002; and (ii) the capitalization of BioMarin as at March 31,      
2002, on an unaudited, as adjusted basis assuming the completion of this        
transaction.                                                                    

                                                        [Enlarge/Download Table]

                                                                                          March 31, 2002       
                                                                                      ------------------------ 
                                                                                        Actual     As adjusted 
                                                                                       ---------   ----------- 
                                                                                      (unaudited, in thousands)
                                                                                                               
Cash, cash equivalents and short term investments.................................... $ 114,798     $ 113,517  
                                                                                       =========    =========  
Long-term liabilities................................................................ $   3,503     $   3,503  
                                                                                       =========    =========  
Stockholders' equity:                                                                                          
   Common stock, $.001 par value, 75,000,000 shares authorized; 53,357,642 shares                              
     issued and outstanding, actual and 53,357,642 shares issued and outstanding, as                           
     adjusted........................................................................        53            53  
   Additional paid-in capital........................................................   316,469       316,469  
   Common stock warrants.............................................................     5,219         5,219  
   Deferred compensation.............................................................      (490)         (490) 
   Notes from stockholders...........................................................    (2,087)       (2,087) 
   Foreign currency translation adjustment...........................................       (74)          (74) 
   Deficit accumulated during development stage......................................  (174,722)     (175,734) 
                                                                                       ---------    ---------  
       Total stockholders' equity....................................................   144,368       143,356  
                                                                                       ---------    ---------  
       Total liabilities and stockholders' equity.................................... $ 157,306     $ 156,025  
                                                                                       =========    =========  

 The number of shares of BioMarin common stock in the actual and as adjusted
columns in the table above excludes:                                            

.   7,820,195 shares of BioMarin common stock issuable upon exercise of     
outstanding options issued under BioMarin's stock option plans at a 
  weighted average exercise price of $11.31 per share at March 31, 2002;

.   an additional 2,784,110 shares of common stock available for future     
    issuance under BioMarin's stock option plans and employee stock purchase
plan at March 31, 2002; and                                         

.   779,846 shares of BioMarin common stock issuable upon exercise of       
   outstanding warrants at a weighted average exercise price of $13.35 per
share as of March 31, 2002.                                         

86  

DEFM14A
100th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 100th
THE ACQUISITION AGREEMENT 

  The following summary of the Acquisition Agreement for a Plan of Arrangement
by and among BioMarin, BioMarin Nova Scotia and Glyko, dated as of February 6,  
2002, as amended by the Amending Agreement dated as of May 16, 2002 and         
attached as Annex A and Annex A-1, respectively to this Joint Proxy Circular    
(collectively, the "Acquisition Agreement"), is qualified in its entirety by    
reference to the complete text of the Acquisition Agreement which is            
incorporated by reference into this Joint Proxy Circular.                       

Structure of the Arrangement                                                    

Under the terms of the Acquisition Agreement, Glyko will enter into a Plan
of Arrangement under the Canada Business Corporations Act, as a result of which 
BioMarin shall acquire each outstanding Glyko common share that is not held by  
a holder who has exercised its dissenters' rights in exchange for 0.3309 of a   
share of common stock of BioMarin. The terms of the Acquisition Agreement       
contemplate the continuance of Glyko under the laws of British Columbia         
following the effectiveness but prior to the actual implementation of the       
arrangement.                                                                    

Completion and Effectiveness of the Arrangement                                 

  BioMarin and Glyko will complete the transaction after all of the conditions
to completion of the arrangement contained in the Acquisition Agreement,        
including the continuance of Glyko under the laws of British Columbia, have     
been satisfied or waived. The arrangement will become effective upon the        
issuance of a certificate of arrangement, issued pursuant to subsection 192(7)  
of the Canada Business Corporations Act after the articles of arrangement have  
been filed.                                                                     

BioMarin and Glyko are working toward satisfying the conditions and       
completing the arrangement as quickly as possible. BioMarin and Glyko currently 
plan to complete the arrangement by the end of the second calendar quarter of   
2002. Because the acquisition is subject to court approval and other            
conditions, some of which are beyond BioMarin and Glyko's control, the exact    
timing of completing the transaction cannot be predicted with certainty.        
However, if the transaction has not been completed by August 30, 2002, either   
party may terminate the Acquisition Agreement, provided that the terminating    
party's own action or failure to act was not the principal cause of the failure 
to complete the transaction by such date.                                       

Exchange of Shares under the Arrangement                                        

At the implementation time of the arrangement, BioMarin Nova Scotia (a    
wholly owned subsidiary of BioMarin) will acquire all of the outstanding common 
shares of Glyko (other than those of dissenting Glyko shareholders who          
ultimately receive from Glyko the fair value of their Glyko common shares), in  
exchange for that portion of a share of BioMarin common stock equal to the      
exchange ratio of 0.3309, subject to anti-dilution adjustment. In no event will 
BioMarin Nova Scotia be required to transfer to the holders of Glyko common     
shares more than 11,367,617 shares of BioMarin common stock in connection with  
the rights of exchange provided for under the Acquisition Agreement. The        
Acquisition Agreement provides that the exchange ratio shall be adjusted to     
reflect appropriately the effect of any stock split, reverse stock split, stock 
dividend, extraordinary cash dividend, reorganization, recapitalization,        
reclassification, combination, exchange of shares or other like change with     
respect to BioMarin common stock.                                               

Each option to purchase Glyko common shares under the Glyko stock option  
plan which remains outstanding at the implementation time of the arrangement    
shall be exchanged for an option to purchase such number of shares of BioMarin  
common stock as are determined in accordance with the Acquisition Agreement and 
the Plan of Arrangement.                                                        

87  

DEFM14A
101st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 101st
Fractional Shares                                                               

No certificates representing fractional shares of BioMarin common stock   
shall be issued upon the surrender for exchange of certificates representing    
Glyko common shares. In lieu of any such fractional securities, each person     
otherwise entitled to a fractional interest (after aggregating all fractional   
shares of BioMarin common stock that otherwise would be received by such        
holder) in a share of BioMarin common stock will be entitled to receive from    
BioMarin Nova Scotia a cash payment (rounded to the nearest whole cent),        
without interest, equal to the product of (i) such fraction, and (ii) the       
average closing price of the shares of BioMarin common stock for the 20 most    
recent days that BioMarin common stock has traded ending on the second trading  
day immediately prior to the effective date of the arrangement, as reported on  
Nasdaq.                                                                         

Representations and Warranties of Glyko                                         

 Glyko made a number of customary representations and warranties to BioMarin
in the Acquisition Agreement regarding aspects of its business, financial       
condition, structure and other facts pertinent to the transaction. These        
representations and warranties include representations and warranties, as of    
February 6, 2002, on:                                                           

.   the corporate organization and qualification to do business of Glyko;   

.   the articles of incorporation and bylaws of Glyko;                      

.   Glyko's capitalization;                                                 

.   authorization of the Acquisition Agreement by Glyko;                    

 .   the absence of conflicts in connection with Glyko's performance under the
Acquisition Agreement;                                              

.   regulatory and third party approvals required by Glyko to complete the  
arrangement;                                                        

.   the filing and consent obligations of Glyko under applicable laws in    
connection with the arrangement;                                    

.   compliance with applicable laws and certain contracts by Glyko;         

.   the absence of government investigation or review of Glyko;             

.   Glyko's filings and reports with Canadian securities regulatory         
authorities and the Toronto Stock Exchange;                         

.   Glyko's financial statements;                                           

.   Glyko's books and records;                                              

.   Glyko's liabilities;                                                    

.   changes in Glyko's business since December 31, 2000 and actions taken by
Glyko since December 31, 2000;                                      

.   litigation involving Glyko;                                             

.   Glyko's employee benefit plans;                                         

.   Glyko's labor relations;                                                

.   the absence of restrictions on the conduct of Glyko's business;         

.   title to the properties Glyko owns and validity of Glyko's leases;      

.   tax matters pertaining to Glyko;                                        

.   environmental matters pertaining to Glyko;                              

 .   payments required to be made by Glyko to brokers and agents in connection
with the arrangement;                                               

88  

DEFM14A
102nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 102nd
.   intellectual property matters pertaining to Glyko;                      

.   Glyko's material contracts and commitments;                             

.   Glyko's insurance coverage;                                             

.   the fairness opinion received by Glyko from TD Securities;              

.   approvals and recommendations by the Glyko board of directors in        
connection with the arrangement;                                    

.   the vote of Glyko shareholders required to adopt and approve the        
Acquisition Agreement and approve the arrangement and related       
transactions;                                                       

.   the minute books of Glyko;                                              

 .   the indemnification obligations of Glyko's directors, officers, agents or
employees;                                                          

 .   the absence of any change of control payments becoming payable due to the
arrangement; and                                                    

.   interested party transactions of Glyko's directors and officers.        

Many of the representations and warranties are qualified by thresholds of 
materiality or to a level of a material adverse effect, and all such            
representations and warranties expire upon completion of the arrangement.       

The representations and warranties contained in the Acquisition Agreement 
are complicated and not easily summarized. You are urged to carefully read      
Article 2 of the Acquisition Agreement entitled "Representations and Warranties 
of Glyko."                                                                      

Representations and Warranties of BioMarin and BioMarin Nova Scotia             

BioMarin and BioMarin Nova Scotia have made a number of customary         
representations and warranties to Glyko in the Acquisition Agreement regarding  
aspects of BioMarin's business, financial condition, structure and other facts  
pertinent to the transaction. These representations and warranties include      
representations and warranties, as of February 6, 2002, on:                     

.   the corporate organization and qualification to do business of BioMarin 
and its subsidiaries;                                               

  .   the articles of incorporation and bylaws of BioMarin and its subsidiaries;

.   BioMarin's capitalization;                                              

.   BioMarin's subsidiaries;                                                

.   the absence of conflicts in connection with BioMarin's and BioMarin Nova
Scotia's obligations under the Acquisition Agreement;               

.   authorization of the Acquisition Agreement by BioMarin and BioMarin Nova
Scotia;                                                             

.   BioMarin's filings and reports with the U.S. Securities and Exchange    
Commission;                                                         

.   BioMarin's financial statements;                                        

.   BioMarin's liabilities;                                                 

.   the validity of BioMarin's issuance of common stock;                    

.   listing of BioMarin's common stock on Nasdaq and on the SWX Swiss       
Exchange;                                                           

.   litigation involving BioMarin and its subsidiaries;                     

.   changes in BioMarin's business since December 31, 2000 and actions taken
by BioMarin since December 31, 2000;                                

.   environmental matters and compliance of BioMarin;                       

89  

DEFM14A
103rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 103rd
.   regulatory and third party approvals required by BioMarin and BioMarin  
Nova Scotia to complete the acquisition;                            

.   the filing and consent obligations of BioMarin under applicable laws and
certain contracts in connection with the acquisition;               

 .   compliance with applicable laws and certain contracts by BioMarin and its
subsidiaries;                                                       

.   tax matters pertaining to BioMarin and its subsidiaries;                

.   the vote of BioMarin stockholders required to approve the transaction,  
  including the issuance of BioMarin common stock in connection with the
arrangement;                                                        

.   payments required to be made by BioMarin to brokers and agents in       
connection with the arrangement;                                    

  .   intellectual property matters pertaining to BioMarin and its subsidiaries;

.   the opinion received by BioMarin from UBS Warburg; and                  

.   approvals and recommendations by BioMarin's board of directors in       
connection with the arrangement.                                    

Many of the representations and warranties are qualified by thresholds of 
materiality or to a level of a material adverse effect, and all such            
representations and warranties expire upon completion of the arrangement.       

The representations and warranties contained in the Acquisition Agreement 
are complicated and not easily summarized. You are urged to carefully read      
Article 3 of the Acquisition Agreement entitled "Representations and Warranties 
of BioMarin and BioMarin Nova Scotia."                                          

Glyko's Conduct of Business Before Completion of the Arrangement                

Under the terms of the Acquisition Agreement Glyko agreed that, until the 
earlier of the completion of the arrangement or termination of the Acquisition  
Agreement, Glyko, except to the extent BioMarin consents in writing, will:      

.   carry on its business in the ordinary course, consistent with past      
     practice and in compliance with applicable laws in all material respects;

.   pay or perform its material obligations when due;                       

.   preserve intact its present business organization;                      

.   keep available the services of its present officers and employees;      

 .   preserve its relationships and goodwill with all persons with whom it has
business relationships;                                             

.   cause its officers to report regularly to BioMarin concerning the status
of Glyko's business;                                                

.   maintain its books of account in the usual manner in accordance with    
Canadian generally accepted accounting principles; and              

.   provide BioMarin and its representatives access during normal business  
hours to Glyko's representatives, personnel, books and records.     

Under the terms of the Acquisition Agreement, Glyko also agreed that,     
subject to certain exceptions, until the earlier of the completion of the       
arrangement or termination of the Acquisition Agreement, or unless BioMarin     
consents in writing, Glyko will comply with certain specific restrictions       
relating to the operation of its business, including restrictions relating to   
the following:                                                                  

.   declaring or paying dividends or other distributions on shares of Glyko;

.   purchasing, redeeming or otherwise acquiring shares of Glyko;           

90  

DEFM14A
104th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 104th
.   issuing shares of Glyko or securities convertible into shares of Glyko; 

.   changes with respect to Glyko's stock option plan or any options        
thereunder;                                                         

.   granting or amending severance and termination payments;                

.   modifying the articles of incorporation or bylaws of Glyko;             

.   reorganizing or merging Glyko, other than in connection with the        
Acquisition Agreement;                                              

.   acquiring any interest in any entity;                                   

.   selling, leasing, licensing or disposing of assets;                     

.   making capital expenditures above $25,000 in the aggregate;             

.   granting loans or purchasing equity interests in other persons;         

.   incurring indebtedness;                                                 

.   adopting or amending employee benefit plans or bonus plans;             

.   increasing the amount of remuneration payable to directors, officers or 
employees;                                                          

.   commencing or settling litigation or liabilities;                       

.   modifying material contracts or waiving material rights under material  
contracts other than in the ordinary course of business;            

.   changing accounting policies and procedures;                            

.   making certain tax elections; and                                       

.   entering into any material transaction or taking any other material     
    action outside the ordinary course of business or inconsistent with past
practices based on Glyko's operating history since June 30, 2000.   

The agreements related to the conduct of Glyko's business (prior to the   
effective time of the arrangement) in the Acquisition Agreement are complicated 
and not easily summarized. You are urged to carefully read Article 4 of the     
Acquisition Agreement entitled "Conduct Prior to the Effective Time."           

Glyko Shareholder Approval and BioMarin Stockholder Approval                    

In connection with obtaining Glyko shareholder approval and BioMarin      
stockholder approval, each of BioMarin and Glyko agreed to provide to the other 
such information concerning its business, financial and other affairs as was    
required for inclusion in this Joint Proxy Circular. BioMarin and Glyko agreed  
to cooperate in all respects to ensure that all information provided for        
inclusion in this Joint Proxy Circular is true, and that all filings required   
to be made pursuant to the requirements of the Canada Business Corporations     
Act, the interim order of the Superior Court of Justice (Ontario), applicable   
Canadian securities legislation, the Toronto Stock Exchange and any other       
Canadian, U.S. or other laws are filed in accordance with such laws.            

You are urged to read carefully Article 5 of the Acquisition Agreement    
entitled "Glyko Shareholder Approval and BioMarin Stockholder Approval" to      
understand more fully the provisions contained therein.                         

Material Covenants                                                              

Confidentiality and Access to Information                                   

  The terms of the Acquisition Agreement incorporate by reference a previously
executed mutual confidentiality agreement, dated as of January 10, 2002. In the 
event of an inconsistency in the terms and conditions of the Acquisition        
Agreement and the terms and conditions of the confidentiality agreement, the    
Acquisition Agreement prevails.                                                 

91  

DEFM14A
105th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 105th
Solicitations by Glyko                                                      

Under the terms of the Acquisition Agreement, Glyko agreed to cease and   
terminate, as of the date of the Acquisition Agreement, any and all existing    
discussions with any parties other than BioMarin with respect to any            
Acquisition Proposal.                                                           

  Under the terms of the Acquisition Agreement, an Acquisition Proposal is any
offer or proposal relating to any Acquisition Transaction. An Acquisition       
Transaction is any transaction or series of related transactions involving any  
of the following:                                                               

.   any merger, consolidation, amalgamation, share exchange, business       
  combination, issuance of securities, acquisition of securities, tender
     offer, exchange offer or other similar transaction involving Glyko or the
  acquisition or purchase from Glyko by any person or group of more than
20% of any class of voting securities of Glyko;                     

.   any sale, lease, exchange, transfer, license, acquisition or other      
disposition of more than 20% of the assets of Glyko; or             

.   any liquidation or dissolution of Glyko.                                

Until the acquisition is completed or the Acquisition Agreement is        
terminated, under the terms of the Acquisition Agreement, Glyko further agreed  
that it will not (nor will it authorize or permit any of its officers,          
directors or employees, or any of its investment bankers, attorneys or other    
advisors or representatives to):                                                

.   solicit, initiate, knowingly encourage, induce or otherwise knowingly   
facilitate any Acquisition Proposal or any inquiries or proposals   
relating to an Acquisition Proposal;                                

.   furnish any confidential information regarding Glyko to any person in   
connection with or in response to an Acquisition Proposal;          

 .   engage in discussions or negotiations with any person with respect to any
Acquisition Proposal;                                               

.   approve, endorse or recommend any Acquisition Proposal; or              

.   enter into any letter of intent or similar document or any contract     
contemplating or otherwise relating to any Acquisition Transaction. 

Prior to the adoption and approval of the arrangement by the Glyko        
shareholders, Glyko and its representatives are not prohibited by (and shall    
not be considered to have violated) the above-mentioned provisions from (i)     
furnishing nonpublic information regarding Glyko to any person in response to   
an Acquisition Proposal that is submitted by such person (and not withdrawn),   
or (ii) entering into discussions with any person in response to an Acquisition 
Proposal that is submitted by such person (and not withdrawn), if (1) in the    
case of (i), the board of directors of Glyko has first made a good faith        
determination that the furnishing of such nonpublic information to such person  
is reasonably likely to lead to the submission of a Superior Offer from such    
person, (2) neither Glyko nor any representative of Glyko shall have violated   
any of the restrictions set forth above, (3) the board of directors of Glyko    
concludes in good faith, based upon the advice of its outside legal counsel,    
that the failure to take such action is inconsistent with its fiduciary         
obligations under applicable law, (4) prior to furnishing any such nonpublic    
information to, or entering into discussions with, such person, Glyko gives     
BioMarin written notice of the identity of such person and of Glyko's intention 
to furnish nonpublic information to, or enter into discussions with, such       
person, and Glyko receives from such person an executed confidentiality         
agreement containing customary limitations on the use and disclosure of all     
nonpublic written and oral information furnished to such person by or on behalf 
of Glyko and following which, Glyko keeps BioMarin fully informed with respect  
to the status of any such Acquisition Proposal and any modification or proposed 
modification thereto, and (5) prior to furnishing any such nonpublic            
information to such person, Glyko furnishes such nonpublic information to       
BioMarin (to the extent such nonpublic information has not been previously      
furnished by Glyko to BioMarin).                                                

92  

DEFM14A
106th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 106th
Under the terms of the Acquisition Agreement, a Superior Offer is an      
unsolicited, bona fide written offer made by a third party (other than BioMarin 
or its affiliates) which, if consummated, would result in such third party      
acquiring, directly or indirectly, securities representing more than 50% of the 
voting power of the shares of Glyko or the resulting entity of such transaction 
or all or substantially all of the assets of Glyko, in each case on terms which 
the board of directors of Glyko reasonably determines (following receipt of     
advice from its financial advisors of nationally recognized reputation and      
outside counsel) to be more favorable to Glyko's shareholders than the terms of 
the arrangement.                                                                

Conditions to Completion of the Arrangement                                     

The obligations of BioMarin and Glyko to complete the arrangement and the 
other transactions contemplated by the Acquisition Agreement are subject to the 
satisfaction at or prior to the closing date of the arrangement of each of the  
following conditions:                                                           

.   the arrangement and the continuance under the laws of British Columbia  
    must have been approved by the requisite vote of holders of Glyko common
shares and in accordance with any additional conditions which may be
    imposed by the interim order of the Superior Court of Justice (Ontario);

.   the arrangement including, without limitation, the issuance of shares of
   BioMarin common stock in connection with the arrangement must have been
approved by the requisite vote of stockholders of BioMarin;         

.   the interim order and the final order of the Superior Court of Justice  
   (Ontario) with respect to the arrangement shall each have been obtained
in form and on terms satisfactory to Glyko and BioMarin;            

.   upon receipt of the interim order and the final order of the Superior   
Court of Justice (Ontario), no shares of BioMarin common stock to be
     issued at the effective time of the arrangement will require registration
pursuant to the United States Securities Act of 1933;               

.   the requisite discretionary orders of the securities regulatory         
authorities exempting certain trades contemplated by the Plan of    
Arrangement from the registration and prospectus requirements of    
applicable Canadian securities legislation shall have been obtained;

.   the shares of BioMarin common stock to be issued under the arrangement  
shall have been authorized for listing on Nasdaq;                   

.   BioMarin, its subsidiaries and Glyko shall have obtained all approvals, 
    waivers and consents from each governmental entity, the failure of which
would cause consummation of the arrangement to be prohibited;       

.   no governmental body shall have enacted, issued, enforced or entered any
 statute, rule, regulation, executive order, decree, judgment or other
    order which has the effect of restraining or prohibiting consummation of
   the transactions contemplated by the Acquisition Agreement or of making
the arrangement illegal; and                                        

.   no legal proceeding shall be pending or threatened in which a           
   governmental body is or is threatened to become a party or is otherwise
involved, and neither BioMarin nor Glyko shall have received any    
   communication from any governmental body in which the governmental body
    indicated the possibility of commencing a legal proceeding or taking any
other action (i) challenging or seeking to restrain or prohibit the 
consummation of the arrangement or any of the other transactions    
contemplated by the Acquisition Agreement; (ii) relating to the     
arrangement and seeking to obtain from BioMarin or any of its       
    subsidiaries, or Glyko, any damages or other relief that may be material
   to BioMarin; (iii) seeking to prohibit or limit in any material respect
BioMarin's ability to vote, receive dividends with respect to or    
   otherwise exercise ownership rights with respect to the stock of Glyko;
     or (iv) which would materially and adversely affect the right of BioMarin
or of Glyko to own the assets or operate the business of Glyko.     

93  

DEFM14A
107th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 107th
Glyko's obligations to complete the arrangement and the other transactions
contemplated by the Acquisition Agreement are subject to the satisfaction or    
waiver, in writing, of each of the following additional conditions:             

.   each of BioMarin's and BioMarin Nova Scotia's representations and       
   warranties shall have been true and correct in all material respects as
   of the date of the Acquisition Agreement, and shall be true and correct
   in all material respects on and as of the date the arrangement is to be
     completed as if made on such date (except to the extent made only as of a
   particular date, in which case they must be true and correct only as of
that date);                                                         

 .   BioMarin and BioMarin Nova Scotia shall have performed or complied in all
    material respects with all of their agreements and covenants required by
  the Acquisition Agreement to be performed or complied with by BioMarin
and BioMarin Nova Scotia;                                           

.   there shall have occurred no material adverse change with respect to    
BioMarin since the date of the Acquisition Agreement;               

 .   Glyko shall have received a certificate executed on behalf of BioMarin by
     its Chief Executive Officer confirming satisfaction of these above listed
conditions; and                                                     

 .   Glyko shall have received an opinion of U.S. counsel and Canadian counsel
to BioMarin satisfactory to Glyko.                                  

BioMarin's obligations to complete the arrangement and the other          
transactions contemplated by the Acquisition Agreement are subject to the       
satisfaction or waiver, in writing, of each of the following additional         
conditions:                                                                     

.   each of Glyko's representations and warranties shall have been true and 
correct in all material respects as of the date of the Acquisition  
Agreement, and shall continue to be true and correct in all material
   respects on and as of the date the arrangement is to be completed as if
made on such date (except to the extent made only as of a particular
    date, in which case they must be true and correct only as of that date);

.   Glyko shall have performed or complied in all material respects with all
    of its agreements and covenants required by the Acquisition Agreement to
be performed or complied with by Glyko;                             

.   the holders of no more than one percent in the aggregate of the issued  
and outstanding Glyko common shares shall have exercised and not    
 withdrawn their dissent rights with respect to the arrangement or the
continuance;                                                        

.   there shall have occurred no material adverse change with respect to    
Glyko since the date of the Acquisition Agreement;                  

 .   BioMarin shall have received a certificate executed on behalf of Glyko by
  its Chairman confirming satisfaction of these above listed conditions;

.   BioMarin shall have received the written resignations of all directors  
and officers of Glyko, effective as of the effective time of the    
arrangement; and                                                    

.   BioMarin shall have received an opinion of U.S. counsel and Canadian    
counsel to Glyko reasonably satisfactory to BioMarin.               

  Some of the conditions to completion of the arrangement may be waived by the
party entitled to assert the benefit of the condition. Neither BioMarin nor     
Glyko intends to solicit shareholder approval of the transaction based on a     
waived condition, unless its board of directors determines in good faith that   
the waiver of such condition is sufficiently material as to warrant seeking     
further shareholder approval.                                                   

94  

DEFM14A
108th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 108th
Termination of the Acquisition Agreement                                        

 The Acquisition Agreement may be terminated at any time prior to completion
of the arrangement, whether before or after the requisite approval of the       
shareholders of Glyko or stockholders of BioMarin:                              

.   by mutual written consent duly authorized by the boards of directors of 
BioMarin and Glyko;                                                 

.   by either BioMarin or Glyko, if the arrangement is not completed by     
 August 30, 2002 for any reason, provided that either party's right to
terminate the Acquisition Agreement under this provision will not be
available to any party whose action or failure to act has been a    
     principal cause of or resulted in the failure of the arrangement to occur
   on or before that date, and such action or failure to act constitutes a
breach of the Acquisition Agreement;                                

.   by either BioMarin or Glyko, if a governmental body has issued an order,
    decree or ruling or taken any other action, which permanently restrains,
 enjoins or otherwise prohibits the arrangement and which is final and
non-appealable;                                                     

.   by either BioMarin or Glyko, if Glyko's shareholders fail to approve the
   Glyko arrangement resolution or the Glyko continuance resolution at the
    Glyko shareholders meeting or at any adjournment or postponement of that
meeting;                                                            

.   by either BioMarin or Glyko, if BioMarin's stockholders fail to approve 
    the arrangement, including the issuance of BioMarin common stock, at the
  BioMarin stockholders meeting or at any adjournment or postponement of
that meeting;                                                       

.   by Glyko, upon a material breach of any representation, warranty,       
    covenant or agreement on the part of BioMarin or BioMarin Nova Scotia in
the Acquisition Agreement, or if any of BioMarin's or BioMarin Nova 
Scotia's representations or warranties become untrue such that the  
   condition to Glyko's obligation to complete the arrangement relating to
the continued accuracy of BioMarin's or BioMarin Nova Scotia's      
  representations and warranties would not be satisfied. However, if the
breach or inaccuracy is curable by BioMarin or BioMarin Nova Scotia 
     through the exercise of its commercially reasonable efforts, and BioMarin
  continues to exercise such commercially reasonable efforts to cure the
 breach, Glyko may not terminate the Acquisition Agreement for 30 days
     after delivery of written notice to BioMarin of the breach. If the breach
    or inaccuracy is cured during those 30 days, Glyko may not terminate the
Acquisition Agreement under this provision;                         

.   by BioMarin, upon a material breach of any representation, warranty,    
   covenant or agreement on the part of Glyko set forth in the Acquisition
Agreement, or if any of Glyko's representations or warranties become
   untrue such that the condition to BioMarin's obligation to complete the
     arrangement relating to the continued accuracy of Glyko's representations
and warranties would not be satisfied. However, if the breach or    
   inaccuracy is curable by Glyko through the exercise of its commercially
 reasonable efforts, and Glyko continues to exercise such commercially
 reasonable efforts to cure the breach, BioMarin may not terminate the
 Acquisition Agreement for 30 days after delivery of written notice to
     Glyko of the breach. If the breach or inaccuracy is cured during those 30
 days, BioMarin may not terminate the Acquisition Agreement under this
provision; and                                                      

.   by BioMarin, if Glyko has breached the provisions of Section 6.2 of the 
 Acquisition Agreement that prohibit the solicitation of, and restrict
     (subject to certain exceptions) discussions and negotiations with respect
to, Acquisition Proposals.                                          

Payment of Termination Fee                                                      

Under the terms of the Acquisition Agreement, Glyko must pay BioMarin a   
termination fee of $1.0 million within two business days after written demand   
by BioMarin, if the Acquisition Agreement is terminated by BioMarin because of  
a material breach of any representation, warranty, covenant or agreement of     
Glyko as described in Section 8.1(g) of the Acquisition Agreement. Glyko must   
also pay BioMarin the termination fee of                                        

95  

DEFM14A
109th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 109th
$1.0 million upon termination of the Acquisition Agreement by BioMarin or Glyko 
if the Glyko shareholders do not approve either the arrangement or the          
continuance and (i) an Acquisition Proposal has been publicly announced or      
otherwise communicated to the Glyko board of directors or the Glyko             
shareholders prior to the date of the special meeting of the Glyko              
shareholders, and (ii) Glyko enters into a definitive agreement with respect to 
an Acquisition Transaction prior to the expiration of six months after          
termination of the Acquisition Agreement, and, in the case of an Acquisition    
Transaction relating to, among other things, any merger, consolidation,         
amalgamation, business combination or sale of the assets or outstanding         
securities of any class of voting securities of Glyko, such transaction results 
in person(s) directly or indirectly acquiring more than 50% of the assets or    
outstanding securities of Glyko.                                                

In addition, BioMarin must pay Glyko a termination fee of $1.0 million    
within two business days after a written demand by Glyko, if the Acquisition    
Agreement is terminated by Glyko because of a material breach of any            
representation, warranty, covenant or agreement of BioMarin as described in     
Section 8.1(f) of the Acquisition Agreement.                                    

Extension, Waiver and Amendment of the Acquisition Agreement                    

BioMarin and Glyko, with the approval of their respective boards of       
directors, may amend the Acquisition Agreement at any time whether before or    
after the approval of the arrangement by the shareholders of Glyko or           
stockholders of BioMarin. However, after any such approval of the arrangement   
by the stockholders of BioMarin or shareholders of Glyko, no amendment shall be 
made which by law requires further approval of the stockholders of BioMarin or  
shareholders of Glyko, as the case may be, without such approval.               

  Prior to completion of the arrangement, either BioMarin or Glyko may, to the
extent legally permitted, extend the other party's time for the performance of  
any of the obligations or other acts under the Acquisition Agreement, waive any 
inaccuracies in the other's representations and warranties and waive compliance 
by the other party with any of the agreements or conditions for the benefit of  
such party contained in the Acquisition Agreement. Such extensions and waivers  
must be set forth in a written instrument signed by the party granting such     
extension or waiver.                                                            

Expenses                                                                        

Except with respect to the termination fee described above, all fees and  
expenses incurred in connection with the Acquisition Agreement and the          
transactions contemplated thereby will be paid by the party incurring such      
expenses whether or not the arrangement is consummated.                         

96  

DEFM14A
110th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 110th
TRANSACTION MECHANICS 

The following is a summary of the Plan of Arrangement. Glyko shareholders 
and BioMarin stockholders are urged to read the Plan of Arrangement in its      
entirety. The Plan of Arrangement is attached to this Joint Proxy Circular as   
Annex B.                                                                        

The Arrangement                                                                 

  Pursuant to the terms of the Plan of Arrangement, at the implementation time
of the arrangement, the following events will occur:                            

 1. Each outstanding Glyko common share held by a Glyko shareholder, other
   than Glyko common shares in respect of which the holder has exercised
  dissent rights and is ultimately entitled to be paid the fair value,
      shall be transferred to BioMarin Nova Scotia in exchange for 0.3309 of a
share of BioMarin common stock.                                   

2. Each Glyko option will be exchanged for an option to purchase that   
      number of shares of BioMarin common stock equal to the product of 0.3309
 and the number of Glyko common shares subject to such Glyko option,
whether exercisable or unexercisable, immediately prior to the    
 implementation time of the arrangement, rounded down to the nearest
whole number of shares. The replacement option will provide for an
 exercise price per share of BioMarin common stock equal to the U.S.
    dollar equivalent of the per share exercise price of each Glyko option
     divided by 0.3309, rounded down to the nearest whole cent. The term and
      vesting schedule of such replacement option shall be equivalent to those
of the Glyko option it replaces.                                  

  Subject to the provisions of the Plan of Arrangement allowing for adjustment
of the exchange ratio for anti-dilution purposes upon the occurrence of certain 
events, the maximum number of shares of BioMarin common stock issuable in       
connection with the exchange of Glyko common shares for BioMarin common stock   
shall be 11,367,617.                                                            

The Continuance                                                                 

 Immediately following the effectiveness of the arrangement but prior to the
implementation of its terms, Glyko will be continued under the laws of British  
Columbia. The continuance will not proceed unless both the arrangement          
resolution and the continuance resolution are passed by the requisite majority  
of Glyko shareholders.                                                          

Share Certificates                                                              

Promptly after the implementation time of the arrangement, BioMarin shall 
cause BioMarin Nova Scotia to deposit with Computershare Trust Company of       
Canada certificates representing the BioMarin common stock issued pursuant to   
the Plan of Arrangement in exchange for the Glyko common shares together with   
cash in an amount sufficient for payment in lieu of fractional shares. Upon     
surrender to Computershare Trust Company of Canada for cancellation of a        
certificate which, immediately prior to the implementation time of the          
arrangement, represented one or more Glyko common shares that were exchanged    
for BioMarin common stock under the arrangement, together with other required   
documents, a Glyko shareholder will be entitled to receive a certificate        
representing that number of shares of BioMarin common stock which such Glyko    
shareholder has the right to receive.                                           

 In the event of a transfer of ownership of Glyko common shares prior to the
implementation time of the arrangement that is not registered in the transfer   
records of Glyko, a certificate representing the proper number of shares of     
BioMarin common stock may be issued to the transferee if the certificate        
representing such Glyko common shares is presented to Computershare Trust       
Company of Canada, accompanied by all documents required to evidence such       
transfer.                                                                       

97  

DEFM14A
111th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 111th
  Until Glyko common share certificates are surrendered as contemplated in the
Plan of Arrangement, each Glyko common share held after the implementation time 
shall represent only the right to receive, upon such surrender, the             
certificates representing shares of BioMarin common stock, the cash payments in 
lieu of any fractional shares and any dividends or distributions payable on the 
shares of BioMarin common stock. No dividends or distributions declared or made 
after the implementation time of the arrangement shall be paid to the holder of 
Glyko common shares until the holder of such certificates surrenders the        
certificates to Computershare Trust Company of Canada.                          

Any certificates formerly representing Glyko common shares that, following
the effective date of the arrangement, are not deposited with Computershare     
Trust Company of Canada, together with a duly executed letter of transmittal,   
within six years after the effective date of the arrangement, shall cease to    
represent a right or claim of any kind.                                         

In addition, as soon as practicable after the effective date of the       
arrangement, the holders of outstanding Glyko options shall be provided with    
documentation evidencing replacement options to acquire common stock of         
BioMarin.                                                                       

  Glyko shareholders are advised to review carefully the information contained
in the letter of transmittal accompanying this Joint Policy Circular and the    
instructions included therein for a more detailed description of the procedures 
to be followed by Glyko shareholders in order to obtain certificates            
representing the shares of BioMarin common stock issuable under the arrangement.

Fractional Shares                                                               

  No fractional shares of BioMarin common stock will be issued pursuant to the
arrangement. Furthermore, no dividend, stock split or other change in the       
capital structure of BioMarin shall relate to any such fraction and any         
fractional interests shall not entitle the owner to vote or to exercise any     
rights as a shareholder of BioMarin. In lieu of any such fractional shares,     
each Glyko shareholder otherwise entitled to a fractional interest in a share   
of BioMarin common stock shall, upon surrender of such holder's certificates    
representing Glyko common shares, receive from BioMarin Nova Scotia a cash      
payment (rounded to the nearest whole cent), without interest, equal to the     
product of such fraction (or, at the option of BioMarin Nova Scotia, the        
Canadian dollar equivalent of such product) and the average closing price of    
shares of BioMarin common stock as quoted on Nasdaq during the period of 20     
consecutive trading days ending on the second trading day immediately preceding 
the effective date of the arrangement.                                          

Rights of Dissent                                                               

 Glyko common shareholders may, in connection with the arrangement, exercise
rights of dissent with respect to such shares pursuant to and in the manner set 
forth in Section 190 of the Canada Business Corporations Act. Those Glyko       
common shareholders who exercise their dissent rights and are determined to be  
entitled to be paid the fair value of their Glyko common shares, shall be       
deemed to have transferred such Glyko common shares to Glyko without further    
act or formality and free of all liens and encumbrances and such shares shall   
be cancelled at the implementation time of the arrangement. Any Glyko common    
shareholders who exercise dissent rights and are determined to be entitled to   
be paid fair value for their Glyko common shares shall be paid solely from the  
assets of Glyko.                                                                

Withholding Rights                                                              

Each of Glyko, BioMarin Nova Scotia and Computershare Trust Company of    
Canada shall be entitled to deduct and withhold from the consideration payable  
such amount as may be required by law under the Income Tax Act (Canada), the    
United States Code or under any other provision of United States or Canadian    
federal, state, provincial, regional, local or foreign tax law. Where such      
amounts are deducted or withheld, such amounts                                  

98  

DEFM14A
112th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 112th
shall be treated for all purposes under the arrangement as having been paid to  
the holder of the shares, provided that such amounts are actually remitted to   
the appropriate taxing authority and the holder is provided with a receipt      
evidencing such remittance.                                                     

The terms and conditions contained in the Plan of Arrangement are         
complicated and not easily summarized. You are urged to carefully read the Plan 
of Arrangement attached as Annex B in its entirety to gain a more complete      
understanding of its terms.                                                     

99  

DEFM14A
113th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 113th
BIOMARIN CAPITAL STOCK  

BioMarin's certificate of incorporation authorizes 1,000,000 shares of    
preferred stock, and 75,000,000 shares of common stock. The only equity         
securities currently outstanding are shares of common stock. As of June 27,     
2002, there were approximately 53,424,129 shares of BioMarin common stock       
issued and outstanding. The following description is only a summary and is      
qualified by reference to the complete text set forth in BioMarin's certificate 
of incorporation.                                                               

BioMarin Preferred Stock                                                        

  Shares of BioMarin preferred stock have a par value of $0.001 per share. The
BioMarin board of directors is authorized to provide for the issuance of shares 
of preferred stock in one or more series, and to establish from time to time    
the number of shares to be included in each such series, to fix the             
designation, powers, preferences and rights of the shares of each such series   
and any qualifications, limitations or restrictions thereof. BioMarin currently 
intends that the shares of Series A Preferred Stock of BioMarin to be           
transferred to Glyko following the completion of the transaction in exchange    
for the 11,367,617 shares of BioMarin common stock owned by Glyko shall be      
redeemable, retractable, non-voting, non-convertible, and entitled to receive   
non-cumulative dividends as and when declared by the BioMarin board of          
directors at a rate of 5% per annum.                                            

BioMarin Common Stock                                                           

Shares of BioMarin common stock have a par value of $0.001 per share. The 
holders of BioMarin common stock are entitled to one vote for each share held   
of record on all matters submitted to a vote of stockholders. The holders of    
BioMarin common stock are entitled to receive such dividends as may be declared 
by the BioMarin board of directors out of funds legally available therefor and  
are entitled upon any liquidation, dissolution or winding-up of BioMarin to     
receive ratably the net assets of BioMarin available for distribution. No       
pre-emptive rights, conversion rights, redemption rights or sinking fund        
provisions are applicable to the BioMarin common stock.                         

GLYKO SHARE CAPITAL 

Glyko's authorized capital is comprised of an unlimited number of common  
shares and an unlimited number of preference shares, issuable in series. As of  
July 4, 2002, 34,352,823 Glyko common shares, options to acquire an additional  
81,397 Glyko common shares and no preference shares were issued and             
outstanding. The following description is only a summary and is qualified by    
reference to the complete text set forth in Glyko's articles of incorporation.  

Common Shares                                                                   

  Each Glyko common share entitles the holder thereof to receive notice of and
to attend meetings of Glyko's shareholders, and to one vote with the exception  
of meetings where only the holders of another class or series of shares are     
entitled to vote. Holders of Glyko common shares are entitled to receive any    
dividends declared on such shares by Glyko's board of directors and to          
participate in the distribution of Glyko's residual assets in the event of      
liquidation or dissolution of Glyko or other distribution of Glyko's assets.    

Preference Shares                                                               

Glyko preference shares may be issued from time to time in one or more    
series, each series comprising the number of shares, designation, rights,       
privileges, restrictions and conditions which the board of directors of Glyko   
determines by resolution. Any Glyko preference shares would rank prior to the   
Glyko common shares with respect to payment of dividends and distributions in   
the event of the liquidation, dissolution or winding-up of Glyko, whether       
voluntary or involuntary. The holders of Glyko preference shares as a class     
would not be entitled to receive notice of, to attend, or to vote at any        
meetings of the shareholders of Glyko except upon a                             

100 

DEFM14A
114th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 114th
proposal to: (i) increase or decrease any maximum number of authorized          
preference shares or increase any maximum number of authorized shares of any    
class of shares having rights or privileges equal or superior to the preference 
shares; (ii) effect an exchange, reclassification or cancellation of all or     
part of the preference shares equal to or superior to the preference shares; or 
(iii) create a new class of shares equal to or superior to the preference       
shares.                                                                         

THE COMPANIES AFTER THE TRANSACTION 

General                                                                         

Upon completion of the transaction, Glyko will become a wholly-owned      
subsidiary of BioMarin Nova Scotia. BioMarin Nova Scotia will continue to exist 
as a wholly-owned subsidiary of BioMarin Acquisition (Del.) Inc., a Delaware    
corporation and a wholly-owned subsidiary of BioMarin. BioMarin's principal     
executive office will continue to be located at 371 Bel Marin Keys Boulevard,   
Suite 210, Novato, California 94949 (telephone number (415) 884-6700). After    
the consummation of the arrangement, BioMarin will indirectly own all of the    
securities of Glyko, which will become a corporation governed by the Company    
Act (British Columbia).                                                         

Directors and Officers                                                          

The directors and officers of BioMarin and BioMarin Nova Scotia,          
respectively, will not change as a result of the transaction.                   

Pro Forma Security Ownership of Certain Beneficial Owners                       

  The following table sets forth certain information on a pro forma basis with
respect to the beneficial ownership of BioMarin's common stock immediately      
following the completion of the transaction as to (i) each person, or group of  
affiliated persons, who is known by BioMarin to own beneficially more than 5%   
of BioMarin's common stock; (ii) each of BioMarin's directors; and (iii) all of 
BioMarin's directors and current executive officers as a group.                 

Except as otherwise noted, the persons or entities in this table have sole
voting and investing power with respect to all the shares of BioMarin's common  
stock beneficially owned by them subject to community property laws, where      
applicable. The information with respect to each person specified is as         
supplied or confirmed by such person, based upon statements filed with the U.S. 
Securities and Exchange Commission or based upon the actual knowledge of        
BioMarin.                                                                       

                                                        [Enlarge/Download Table]

                                                    Number of Shares      Number of Shares     Percentage of 
            Name of Beneficial Owner              Beneficially Owned(1) Subject To Options(2) Common Stock(3)
            ------------------------              --------------------- --------------------- ---------------
                                                                                                             
Franklin Resources Inc...........................       3,246,245                     0             6.0%     
Fredric D. Price.................................         395,597               370,597               *      
Franz L. Cristiani...............................               0                     0              --      
Phyllis I. Gardner, M.D..........................          15,000                15,000               *      
Erich Sager......................................         228,845               149,945               *      
Vijay B. Samant..................................               0                     0              --      
Gwynn R. Williams................................       1,015,065                72,500             1.9%     
All current executive officers and directors as a                                                            
  group (8 persons)..............................       2,632,489             1,189,429             4.9%     

--------                                                                        
*  Represents less than 1% of BioMarin's outstanding common stock.            

(1) The "Number of Shares Beneficially Owned" column is based on shares of      
 common stock outstanding at June 27, 2002. Shares of common stock subject
   to options or warrants that are exercisable within 60 days of June 27, 2002
(the "Number of Shares Beneficially Owned") are deemed to be outstanding
  and to be beneficially owned by the person holding the options or warrants
   for the purpose of computing the percentage ownership of the person but are
not treated as outstanding for the purpose of computing the percentage  
ownership of any other person.                                          

101 

DEFM14A
115th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 115th
(2) The "Number of Shares Subject to Options" enumerates for each 5%            
stockholder, director and current executive officer and for all officers
and directors in the aggregate, the shares of common stock subject to   
options exercisable within 60 days of June 27, 2002. These shares are in
the calculation of the "Number of Shares Beneficially Owned."           

(3) Based on the projected number of shares of BioMarin's common stock that     
   would be outstanding after taking into account: (i) the number of shares of
BioMarin common stock to be issued pursuant to the transaction; and (ii)
   the cancellation of shares of BioMarin common stock currently held by Glyko
   in exchange for shares of BioMarin preferred stock to be issued to Glyko in
exchange therefor.                                                      

Dividend Policy                                                                 

BioMarin has not paid or declared dividends on its shares and does not    
anticipate paying dividends in the foreseeable future.                          

Independent Auditors                                                            

 Effective on June 11, 2002, KPMG LLP, was appointed to serve as independent
auditors of BioMarin and its subsidiaries.                                      

Transfer Agent and Registrar                                                    

It is anticipated that Mellon Investor Services LLC will continue as      
BioMarin's transfer agent and registrar for the BioMarin common stock in the    
United States after the completion of the arrangement.                          

102 

DEFM14A
116th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 116th
BUSINESS OF BIOMARIN  

Overview                                                                        

BioMarin develops enzyme therapies to treat serious, life-threatening     
diseases and conditions. BioMarin leverages its expertise in enzyme biology to  
develop product candidates for the treatment of genetic diseases, including MPS 
I, MPS VI and PKU, as well as other critical care situations such as            
cardiovascular surgery and serious burns. BioMarin's product candidates address 
markets for which no products are currently available or where current products 
have been associated with major deficiencies. BioMarin focuses on conditions    
with well-defined patient populations, including genetic diseases, which        
require chronic therapy.                                                        

 BioMarin's lead product candidate, Aldurazyme(TM), which recently completed
a Phase 3 trial, is being developed for the treatment of Mucopolysaccharidosis  
I (MPS I) disease. MPS I is a debilitating and life-threatening genetic disease 
caused by the deficiency of (alpha)-L-iduronidase, an enzyme responsible for    
breaking down certain carbohydrates. MPS I is a progressive disease that        
afflicts patients from birth and frequently leads to severe disability and      
early death. There are currently no drugs on the market for the treatment of    
MPS I. Aldurazyme has received both fast track designation from the FDA and     
orphan drug designation for the treatment of MPS I in the United States and in  
the European Union. The impact of these designations is discussed under         
"--Government Regulation." BioMarin is developing Aldurazyme through a joint    
venture with Genzyme Corporation. In collaboration with Genzyme, BioMarin       
completed a double-blinded, placebo-controlled Phase 3 clinical trial of        
Aldurazyme in August 2001. On November 2, 2001, BioMarin announced positive     
results from this trial. On April 1, 2002, BioMarin announced that together     
with its joint venture partner, Genzyme, BioMarin has filed with European       
regulatory authorities for approval to market Aldurazyme. The joint venture     
submitted a Marketing Authorization Application (MAA) to the European Medicines 
Evaluation Agency (European Union) (or EMEA) on March 1, 2002. The EMEA has     
accepted BioMarin's MAA and validated that it is complete and ready for         
scientific review. Accordingly, the EMEA's Committee for Proprietary Medicinal  
Products (CPMP) will now evaluate the application to determine whether to       
approve Aldurazyme for the treatment of MPS I in all 15 member states of the    
European Union. Norway and Iceland also participate in the CPMP but have a      
separate approval process. On April 15, 2002, Genzyme and BioMarin announced    
that the joint venture filed the first portion of a "rolling" Biologics License 
Application (BLA) with the FDA for approval to market Aldurazyme in the United  
States. BioMarin anticipates a response from the FDA regarding the application  
to market Aldurazyme in the United States during the first half of 2003.        

BioMarin is developing its second product candidate, Neutralase(TM), for  
reversal of anticoagulation by heparin in patients undergoing Coronary Artery   
Bypass Graft, or CABG, surgery and angioplasty. BioMarin acquired rights to     
Neutralase through its recent acquisition of the pharmaceutical assets of IBEX  
Technologies Inc. in the fourth quarter of 2001. Heparin is a carbohydrate drug 
commonly used to prevent coagulation, or blood clotting, during certain types   
of major surgery. Neutralase is a carbohydrate-modifying enzyme that cleaves    
heparin, allowing coagulation of blood and aiding patient recovery following    
CABG surgery and angioplasty. Based on data from previous trials, BioMarin      
plans to initiate a Phase 3 trial in CABG surgery in the third quarter of 2002. 

In addition to Aldurazyme and Neutralase, BioMarin is developing other    
enzyme-based therapeutics for the treatment of a variety of diseases and        
conditions. In 2001, BioMarin announced a Phase 1 trial of Aryplase(TM)         
(formerly referred to as rhASB) for the treatment of MPS VI, another seriously  
debilitating genetic disease. Based on data from this previous trial, BioMarin  
initiated a Phase 2 trial of Aryplase in March 2002. BioMarin is also           
developing Vibrilase(TM) (formerly referred to as Vibriolysin Topical), a       
topical enzyme product for use in removing burned skin tissue in preparation    
for skin grafting or other therapy. BioMarin initiated a Phase 1 clinical trial 
of Vibrilase in the United Kingdom in the fourth quarter of 2001, and expects   
to begin a Phase 2 clinical trial in either the United States or the United     
Kingdom following the completion of this Phase 1 trial. In addition, BioMarin   
is pursuing preclinical development of other enzyme product candidates for      
genetic and other diseases.                                                     

103 

DEFM14A
117th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 117th
Recent Developments                                                             

  On April 22, 2002, BioMarin announced that it had begun dosing patients in a
Phase 2 clinical trial of Aryplase for the treatment of MPS VI. The primary     
objective of this open-label, multi-national Phase 2 clinical trial will be to  
evaluate the efficacy, safety and pharmacokinetics of weekly intravenous        
infusions of 1.0 mg/kg of Aryplase in 10 MPS VI patients. This dose represents  
the higher level of two doses administered in the six-patient Phase 1 trial.    

On April 15, 2002, Genzyme and BioMarin announced that the joint venture  
filed the first portion of a "rolling" Biologics License Application (BLA) with 
the FDA for approval to market Aldurazyme in the United States. BioMarin plans  
to complete the BLA filing in the third quarter of this year. The BLA will      
include six months of data from the ongoing open-label Phase 3 extension study  
in addition to the six-month data from the placebo-controlled portion of the    
Phase 3 trial. Patients from both the treatment and placebo arms of the Phase 3 
trial had received at least six months of weekly Aldurazyme infusions in the    
open-label extension study as of February 8, 2002. Genzyme and BioMarin         
anticipate a response from the FDA regarding the application to market          
Aldurazyme in the United States during the first half of 2003.                  

On April 1, 2002, BioMarin announced that together with its joint venture 
partner, Genzyme, BioMarin has filed with European regulatory agencies for      
approval to market Aldurazyme. BioMarin's joint venture submitted an MAA to the 
EMEA on March 1, 2002. The EMEA has accepted BioMarin's MAA and validated that  
it is complete and ready for scientific review. Accordingly, the EMEA's         
Committee for Proprietary Medicinal Products (CPMP) will now evaluate the       
application to determine whether to approve Aldurazyme for the treatment of MPS 
I in all 15 member states of the European Union. Norway and Iceland also        
participate in the CPMP but have a separate approval process.                   

 On March 21, 2002, BioMarin acquired Synapse Technologies Inc. Synapse owns
the rights to certain proprietary technology which, based on the results of     
preclinical trials, has the potential to deliver therapeutic enzymes and other  
drugs across the blood-brain barrier by means of traditional intravenous        
injections. Under the terms of the agreement, BioMarin purchased 100% of the    
outstanding shares of Synapse for approximately $10.2 million payable in        
885,242 shares of its common stock. BioMarin also may make future contingent    
payments of up to approximately $6 million. These payments are payable in cash  
or stock, at BioMarin's option.                                                 

On February 7, 2002, BioMarin announced that it had reached a definitive  
agreement to acquire all of the outstanding capital stock of Glyko pursuant to  
the Acquisition Agreement as described in this Joint Proxy Circular.            

In December 2001, BioMarin decided to close the analytics product catalog 
business of its wholly-owned subsidiary, Glyko, Inc. The majority of the Glyko, 
Inc. employees will be incorporated into BioMarin's pharmaceutical business and 
such employees will continue to provide necessary analytic and diagnostic       
support to BioMarin's therapeutic products. Certain operating assets of Glyko,  
Inc. may be offered for sale.                                                   

On December 12, 2001, BioMarin completed a public offering of its common  
stock. In the offering, BioMarin sold 8,050,000 shares, including 1,050,000     
shares to cover underwriters' over-allotments, at a price to the public of      
$12.00 per share, or a total offering price of $96.6 million. The net proceeds, 
after expenses and underwriting discounts, were approximately $90.4 million.    
BioMarin intends to use the net proceeds from this sale of shares for:          

.   the development and commercialization of its lead product candidate,    
Aldurazyme;                                                         

.   additional clinical trials and manufacturing of Neutralase;             

 .   preclinical studies and clinical trials for its other product candidates;

.   potential licenses and other acquisitions of complementary technologies 
and products;                                                       

104 

DEFM14A
118th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 118th
.   general corporate purposes; and                                         

.   working capital.                                                        

 On November 2, 2001, BioMarin and Genzyme announced positive results from a
preliminary analysis of data from the Phase 3 clinical trial of Aldurazyme for  
the treatment of MPS I. Patients were evaluated at defined intervals to assess  
progress in meeting two primary endpoints. The preliminary data analysis showed 
a statistically significant increase in pulmonary capacity (p=0.028) and        
demonstrated a positive trend in endurance as measured by a six-minute walk     
test (p=0.066). Among other endpoints measured in the trial, the main findings  
of an earlier open-label study of Aldurazyme were confirmed: a reduction in     
liver size and a reduction in excretion of urinary glycosaminoglycans, or GAGs, 
the carbohydrate substances that accumulate in patients with MPS I. Based on    
the strength of the trial's results, BioMarin, along with Genzyme, has met with 
U.S. and European regulatory authorities to discuss applications to market      
Aldurazyme. Based on these discussions, the MAA has been submitted to the EMEA. 
BioMarin plans to file the BLA with the FDA as soon as possible.                

On October 31, 2001, BioMarin acquired the pharmaceutical assets of IBEX  
Technologies Inc. and its subsidiaries. The product candidates and technologies 
that BioMarin gained in this transaction, primarily the Neutralase and          
Phenylase programs, are complementary to BioMarin's existing product portfolio  
and core competencies. Under the terms of the agreements, BioMarin acquired     
these assets in exchange for consideration of $10.4 million, with $8.4 million  
payable in shares of its common stock and $2.0 million payable in cash. In      
addition, BioMarin agreed to make contingent cash payments of up to             
approximately $9.5 million to IBEX upon FDA approval of products acquired from  
IBEX.                                                                           

Lead Product Development Programs                                           

Aldurazyme                                                              

BioMarin's lead product candidate, Aldurazyme, is being developed for the 
treatment of MPS I. MPS I is a genetic disease caused by the deficiency of      
(alpha)-L-iduronidase. Patients with MPS I have multiple debilitating symptoms  
resulting from the buildup of carbohydrate residues in all tissues in the body. 
These symptoms include delayed physical growth, enlarged livers and spleens,    
skeletal and joint deformities, airway obstruction, heart disease, reduced      
endurance and pulmonary function, impaired hearing and vision, and in some      
cases, delayed mental development. Most patients with MPS I will die from       
complications associated with the disease as children or teenagers. About 3,400 
individuals in developed countries have MPS I, including about 1,000 in the     
United States and Canada.                                                       

There are currently no approved drugs for the treatment of MPS I. Bone    
marrow transplantation has been used to treat severely affected patients,       
generally under the age of two, with limited success. Bone marrow               
transplantation is associated with high morbidity and mortality rates as well   
as with problems inherent in the procedure itself, including graft vs. host     
disease, graft rejection, and donor availability, which severely limit its      
utility and application.                                                        

Aldurazyme is a specific form of recombinant human (alpha)-L-iduronidase  
that replaces a genetic deficiency of (alpha)-L-iduronidase in MPS I patients,  
thus reducing or eliminating the build-up of certain carbohydrates in the       
lysosomes of cells. By eliminating this carbohydrate build-up, Aldurazyme is    
able to significantly reduce physical symptoms experienced by these patients.   
The Phase 1 trial results of this product candidate reported no neutralizing    
antibodies, indicating its applicability for chronic administration. In         
collaboration with Genzyme, BioMarin completed a 45-patient, double-blinded,    
placebo-controlled Phase 3 clinical trial of Aldurazyme in August 2001, which   
was conducted at five sites in the U.S., Europe and Canada. All patients        
completed the trial and elected to receive Aldurazyme in an open label          
extension study. On November 2, 2001, BioMarin announced positive results from  
this trial. BioMarin intends to continue the development of this drug and       
recently filed an MAA with the EMEA and a "rolling" BLA with the FDA.           

105 

DEFM14A
119th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 119th
Aldurazyme has received fast track designation from the FDA for the       
treatment of MPS I. The FDA has granted Aldurazyme orphan drug designation,     
which will result in exclusive rights to market Aldurazyme to treat MPS I for   
seven years from the date of FDA approval if Aldurazyme is the first product to 
be approved by the FDA for the treatment of MPS I. In addition, the European    
Commission has designated Aldurazyme for the treatment of MPS I as an orphan    
medicinal product, giving the potential for market exclusivity in Europe for    
10 years. In September 1998, BioMarin formed a 50/50 joint venture with Genzyme 
for the worldwide development and commercialization of Aldurazyme. Genzyme is   
responsible for regulatory submissions in international markets and marketing,  
distribution, sales and obtaining reimbursement for Aldurazyme worldwide.       
BioMarin is responsible for U.S. regulatory submissions and the development and 
manufacturing of (alpha)-L-iduronidase.                                         

Neutralase                                                              

BioMarin is developing Neutralase for the reversal of anticoagulation by  
heparin in patients undergoing Coronary Artery Bypass Graft, or CABG, surgery   
and angioplasty. Patients undergoing CABG surgery and angioplasty are treated   
with heparin to prevent coagulation during surgery. Once the procedure is       
completed, anticoagulant reversal agents are administered to prevent excessive  
bleeding. Currently, protamine is the only product commercially available for   
the reversal of heparin anticoagulation. In medical studies, protamine has been 
associated with adverse side effects, such as abnormal changes in blood         
pressure, depression of heart function and acute allergic reactions. There were 
approximately 571,000 CABG procedures and 1,069,000 angioplasties in the United 
States in 1999 (as published by the American Heart Association in their 2002    
Heart and Stroke Statistical Update) that could have potentially benefited from 
heparin reversal. BioMarin believes that an additional substantial market       
opportunity exists in Europe and the rest of the world.                         

BioMarin believes Neutralase has the potential to reverse heparin         
anticoagulation without many of the serious side-effects associated with        
protamine. Neutralase is a carbohydrate-modifying enzyme that breaks down       
heparin in a manner that inactivates heparin's anticoagulation effect and       
restores the normal coagulation of blood. Neutralase has the potential for use  
as a reversal agent for heparin anticoagulation in open-heart surgery such as   
CABG procedures, interventional cardiology procedures such as angioplasty, and  
in other procedures where heparin or heparin-like anticoagulants are used, such 
as in hip and knee surgeries.                                                   

Data from Phase 1 and Phase 2 clinical trials suggest that Neutralase can 
reverse heparin anticoagulation without the adverse changes in blood pressure   
associated with protamine usage. Building on the work undertaken so far,        
BioMarin intends to initiate a Phase 3 trial for CABG in the third quarter of   
2002, followed by a Phase 2B trial for angioplasty.                             

Other Product Development Programs                                          

Aryplase                                                                

 BioMarin is developing recombinant, human N-acetylgalactosamine 4-sulfatase
(Aryplase) for the treatment of MPS VI, a debilitating genetic disease similar  
to MPS I. Aryplase has received fast track designation from the FDA as well as  
orphan drug designation for the treatment of MPS VI in the United States and in 
the European Union. Based on clinical data to date, BioMarin initiated a Phase  
2 trial of Aryplase in March 2002.                                              

Vibrilase                                                               

BioMarin is developing Vibrilase for use in removing burned skin in       
preparation for skin grafting or other therapy. In the fourth quarter of 2001,  
BioMarin initiated a Phase 1 clinical trial of this product candidate in the    
United Kingdom, and expects to begin a Phase 2 clinical trial in either the     
United States or the United Kingdom following the completion of this Phase 1    
trial.                                                                          

106 

DEFM14A
120th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 120th
Phenylase                                                               

  BioMarin is developing Phenylase as an oral enzyme therapy for patients with
phenylketonuria (PKU) a genetic disease in which the body cannot properly       
metabolize the amino acid phenylalanine. If left untreated, elevated levels of  
phenylalanine lead to brain damage and severe mental retardation. Phenylase is  
currently in preclinical development.                                           

BioMarin's Strategy                                                             

BioMarin's strategy is to develop therapeutic enzyme products to treat a  
variety of diseases and conditions. The principal elements of this strategy are 
to:                                                                             

Develop and successfully commercialize its lead product candidates          

  BioMarin is seeking to develop and globally commercialize Aldurazyme for the
treatment of MPS I, Neutralase for the reversal of anticoagulation agents,      
Aryplase for MPS VI, and Vibrilase for serious burns, each of which is in human 
clinical testing. With regard to Aldurazyme, in concert with its joint venture  
partner, Genzyme, BioMarin is developing strategies for the effective launch of 
this product. BioMarin believes it will benefit from Genzyme's marketing        
organization, which has extensive world-wide experience marketing drugs to      
well-defined patient populations with chronic genetic diseases.                 

Continue to build a diversified portfolio of product candidates             

 In addition to the products in human clinical testing noted above, BioMarin
is conducting research on other enzyme products, including those intended to    
treat PKU (Phenylase), ischemia (Extravase), and diseases in which it is        
necessary to treat the brain (NeuroTrans).                                      

Target underserved markets                                                  

BioMarin intends to continue to target market opportunities where there is
little or no competition, such as the markets for MPS I and MPS VI. BioMarin    
also targets markets where it believes that its technology will enable it to    
become a market leader in a relatively short time period, such as the market    
for Neutralase. BioMarin's strategy is to avoid situations where market         
differentiation is a function of marketing strength and not technical expertise.

Seek to license or acquire complementary products and technologies          

BioMarin intends to supplement its internal drug discovery efforts through
the acquisition of products and technologies that complement its general        
product development strategy. Two examples of this are BioMarin's recent        
acquisition of the pharmaceutical assets of IBEX Technologies, which added      
three complementary product candidates to BioMarin's portfolio and its          
acquisition of Synapse Technologies Inc., which added technology intended to    
enable certain drug products to cross the blood-brain-barrier by means of       
traditional intravenous injection. BioMarin intends to continue to identify,    
evaluate and pursue the licensing or acquisition of other strategically         
valuable products and organizations.                                            

Leverage BioMarin's core competencies                                       

BioMarin believes that it has significant expertise in enzyme biology and 
manipulation, which it has used to establish a strong platform for the          
development of enzyme-related pharmaceutical products. BioMarin intends to      
leverage these competencies to develop high-value products for markets with     
unmet medical needs. When strategically advantageous, BioMarin may seek         
partnerships with industry leaders for the further advancement of its product   
candidates.                                                                     

107 

DEFM14A
121st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 121st
Manufacturing                                                                   

  The drug candidates BioMarin is currently developing require the manufacture
of recombinant enzymes. For BioMarin's genetic disease programs, BioMarin       
expects to manufacture the bulk enzymes. BioMarin believes that it will be able 
to manufacture sufficient quantities of its genetic disease drug products for   
clinical trials and commercial sales in part because relatively low doses are   
required for treatment and because the targeted patient populations are small.  
In general, BioMarin expects to contract with outside service providers for     
certain manufacturing services, including final product fill and finish         
operations and bulk enzyme production for clinical and early commercial         
production where the production requirements exceed its manufacturing capacity. 

In the first quarter of 2000, BioMarin began production of Aldurazyme for 
clinical requirements including the Phase 3 clinical trial and other clinical   
studies. The bulk production is being done in BioMarin's Galli Drive (Novato,   
California) manufacturing facility. Following the recently completed expansion, 
Galli is a 51,800 square foot cGMP production facility including support areas, 
housing utilities, laboratories and administrative functions. BioMarin expects  
to support the commercial launch of Aldurazyme from this facility. Vialing and  
packaging will be performed using either BioMarin's joint venture partner or    
contract manufacturers.                                                         

In 2000, the manufacturing facilities in Novato were inspected and        
subsequently licensed by the State of California Food and Drug Branch for the   
production of clinical trial material. These facilities will be inspected by    
the FDA and other regulatory agencies in connection with the BLA and other      
marketing application. These facilities, and those of any third-party           
manufacturers, will be subject to periodic inspections confirming compliance    
with applicable law. BioMarin's facilities must be cGMP certified before it can 
manufacture its drugs for commercial sales. Failure to comply with these        
requirements could result in the shutdown of BioMarin's facilities, fines or    
other penalties.                                                                

Sales and Marketing                                                             

 BioMarin has no experience marketing or selling pharmaceutical products. To
commercially market its products once the necessary regulatory approvals are    
obtained, BioMarin must either develop its own sales and marketing force or     
enter into arrangements with third parties.                                     

BioMarin established a joint venture with Genzyme for the worldwide       
development and commercialization of Aldurazyme for the treatment of MPS I.     
Under the joint venture, Genzyme will be responsible for marketing,             
distribution, sales and obtaining reimbursement of Aldurazyme worldwide.        

In the future, BioMarin may develop the capability to market and sell its 
drug products that are targeted at small or concentrated patient populations.   
In many cases, BioMarin believes that these patient populations are typically   
well-informed and well-connected to the medical community. Often family/patient 
groups suffering from niche diseases are capable users of the Internet to share 
experiences and gather information. BioMarin believes that direct marketing to  
these families or patients would be effective. BioMarin may also market its     
products through distributors or other collaborators, particularly for those    
products targeted at larger patient populations or for countries where the      
development of an infrastructure is not economically attractive.                

Patents and Proprietary Rights                                                  

BioMarin's success depends in part on its ability to:                     

.   Obtain patents                                                          

.   Protect trade secrets                                                   

.   Operate without infringing the proprietary rights of others             

.   Prevent others from infringing on BioMarin's proprietary rights         

  BioMarin may obtain licenses to patents and patent applications from others.

108 

DEFM14A
122nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 122nd
BioMarin has thirteen patent applications presently pending in the United 
States Patent and Trademark Office. BioMarin has filed six foreign counterpart  
applications and expects to file a foreign counterpart to one of the other      
pending U.S. patent applications at the proper time.                            

Glyko, Inc. owns twelve issued U.S. patents. In addition, Glyko, Inc. has 
licensed four U.S. patents and their foreign counterparts from AstroMed Ltd.    
and its successor Astroscan Ltd. on an exclusive, worldwide, perpetual and      
royalty-free basis. Glyko, Inc. has also licensed six U.S. patents from         
Glycomed Incorporated on an exclusive, worldwide, perpetual and royalty-free    
basis. These patents are all related to Glyko, Inc.'s products and services.    

Government Regulation                                                           

Food and Drug Administration Modernization Act of 1997                      

The Food and Drug Administration Modernization Act of 1997 was enacted, in
part, to ensure the availability of safe and effective drugs, biologics and     
medical devices by expediting the FDA review process for new products. The      
Modernization Act establishes a statutory program for the approval of fast      
track products, including biologics. The fast track provisions essentially      
codify the FDA's accelerated approval regulations for drugs and biologics. A    
fast track product is defined as a new drug or biologic intended for the        
treatment of a serious or life-threatening condition that demonstrates the      
potential to address unmet medical needs for this condition. Under the fast     
track program, the sponsor of a new drug or biologic may request the FDA        
designate the drug or biologic as a fast track product at any time during the   
clinical development of the product. The Modernization Act specifies that the   
FDA must determine if the product qualifies for fast track designation within   
60 days of receipt of the sponsor's request.                                    

Approval of a license application for a fast track product can be based on
an effect on a clinical endpoint or on a surrogate endpoint that is reasonably  
likely to predict clinical benefit. Approval of a license application for a     
fast track product based on a surrogate endpoint may be subject to:             

.   Post-approval studies to validate the surrogate endpoint or confirm the 
effect on the clinical endpoint                                     

.   Prior review of all promotional materials                               

If a preliminary review of the clinical data suggests that the product is 
effective, the FDA may initiate review of sections of a license application for 
a fast track product before the application is complete. This rolling review is 
available if the applicant provides a schedule for submission of remaining      
information and pays applicable user fees. However, the time period specified   
in the Prescription Drug User Fees Act, which governs the time period goals the 
FDA has committed to reviewing a license application, does not begin until the  
complete application is submitted.                                              

In September 1998, the FDA designated Aldurazyme a fast track product for 
the more severe forms of MPS I. In June 2000, the FDA designated Aryplase a     
fast track product for the treatment of MPS VI. BioMarin cannot predict the     
ultimate impact, if any, of the fast track process on the timing or likelihood  
of FDA approval of Aldurazyme, Aryplase or any of BioMarin's other potential    
products.                                                                       

Orphan Drug Designation                                                     

  In September 1997, Aldurazyme received orphan drug designation from the FDA.
In February 1999, Aryplase received orphan drug designation from the FDA.       
Orphan drug designation is granted by the FDA to drugs intended to treat a rare 
disease or condition, which for this program is defined as having a prevalence  
less than 200,000 individuals in the United States. Orphan drug designation     
must be requested before submitting a biologics license application. After the  
FDA grants orphan drug designation, the generic identity of the therapeutic     
agent and its potential orphan use are disclosed publicly by the FDA. A similar 
system for orphan drug designation exists in the European Community. Both       
Aldurazyme and Aryplase received designation as orphan medicinal products by    
the European Commission in February 2001.                                       

109 

DEFM14A
123rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 123rd
 Orphan drug designation does not shorten the regulatory review and approval
process for an orphan drug, nor does it give that drug any advantage in the     
regulatory review and approval process. If an orphan drug later receives        
approval for the indication for which it has designation, the relevant          
regulatory authority may not approve any other applications to market the same  
drug for the same indication, except in very limited circumstances, for seven   
years in the U.S. and ten years in Europe. Although obtaining approval to       
market a product with orphan drug exclusivity may be advantageous, BioMarin     
cannot be certain:                                                              

 .   that BioMarin will be the first to obtain approval for any drug for which
it obtains orphan drug designation,                                 

.   that orphan drug designation will result in any commercial advantage or 
reduce competition, nor                                             

.   that the limited exceptions to this exclusivity will not be invoked by  
the relevant regulatory authority.                                  

Competition                                                                     

The biopharmaceutical industry is rapidly evolving and highly competitive.
BioMarin has not yet received governmental approval to commercially market any  
of its pharmaceutical products. Accordingly, it has no share of markets for any 
of its product programs. For each of BioMarin's major biopharmaceutical product 
programs, the following is an analysis of the known competitive threats         
BioMarin expects to possibly face when, and if, those products are approved for 
commercial sale.                                                                

Aldurazyme for MPS I                                                        

On November 21, 2000 and May 29, 2001, respectively, Transkaryotic        
Therapies, Inc. (TKTX) announced that two U.S. patents on (alpha)-L-iduronidase 
had been issued and that these patents had been exclusively licensed to TKTX.   
BioMarin has examined the patents, the patent files, the prior art and other    
information. BioMarin believes that the patents may not survive a challenge.    
However, the processes of patent law are uncertain and any patent proceeding is 
subject to multiple unanticipated outcomes. BioMarin believes that it is in the 
best interests of its joint venture with Genzyme to pursue the development of   
Aldurazyme with commercial diligence, concurrent with BioMarin's challenge of   
the patents, in order to gain marketing approvals as rapidly as possible and to 
provide MPS I patients with the benefits of Aldurazyme. If either or both of    
the patents are deemed (or ruled) to be valid, the joint venture will need to   
reach an accommodation with the holder of the license to the patent.            

These patents do not affect BioMarin's ability to market Aldurazyme in    
Europe or Japan, both major pharmaceutical markets. A patent making the same    
claims was rejected by the European Community and cannot be refiled.            

 A small private company announced that it has novel enzymatic technology to
make enzymes with proper glycosylation and phosphorylation. Since that          
announcement, that company has been acquired by BioMarin's joint venture        
partner, Genzyme. Pursuant to BioMarin's joint venture agreement with Genzyme,  
both Genzyme and BioMarin must mutually agree on any technological developments 
relating to Aldurazyme. The proper carbohydrate and phosphate structural        
elements of the enzyme are essential to facilitate uptake of the enzyme by the  
patient's cells to have efficient enzyme replacement therapy. BioMarin's        
preclinical analysis indicates that Aldurazyme is highly efficient in being     
taken up by cells during enzyme replacement therapy as a result of the proper   
mannose-6-phosphate ligands (glycosylation and phosphorylation) on the enzyme.  
BioMarin does not have any comparative data to assess directly the relative     
potential therapeutic qualities of Aldurazyme and the other enzyme.             

Neutralase for Anticoagulation Reversal                                     

Currently protamine sulfate, in the U.S., and protamine chloride, in the  
European Union, are the only products used to reverse heparin. Neutralase, if   
approved, would have to compete with protamine in the market place.             

110 

DEFM14A
124th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 124th
Protamine is relatively inexpensive; and so for Neutralase to achieve           
significant market share, clinical data will be needed to demonstrate           
advantages in safety or efficacy or both for the reversal of heparin. BioMarin  
believes that Neutralase has superior characteristics but cannot predict that   
clinical studies will demonstrate this superiority. Other than protamine, there 
are no significant competitive drugs in clinical trials for the reversal of     
heparin.                                                                        

  An alternative source of competition comes from substitutes for heparin, and
hence reducing the need for Neutralase. The Medicines Company has an approved   
drug Angiomax(TM) (hirudin) that is a substitute for heparin in angioplasty and 
potentially other indications. BioMarin cannot predict how much this competitor 
will reduce the potential market size of Neutralase for angioplasty or other    
indications. One additional source of competition comes from changes in medical 
practice that may decrease the use of procedures that require heparin and so    
Neutralase. Off-pump coronary artery bypass surgery has increased in frequency  
and the amount of heparin used is less, though heparin is still used. Increased 
off-pump CABG could reduce the use of heparin to some degree and therefore      
decrease the market for Neutralase. Other unpredictable changes in medical      
practice or other non-heparin-like anticoagulants could occur or be approved    
and potentially reduce the market for Neutralase. At this time, BioMarin does   
not foresee a large competitive challenge to heparin or the need for heparin    
reversal.                                                                       

Aryplase for MPS VI                                                         

BioMarin knows of no active competitive program for enzyme replacement    
therapy for MPS VI that has entered clinical trials.                            

Gene therapy is a potential competitive threat to enzyme replacement      
therapies for both MPS I and MPS VI. BioMarin knows of no competitive program   
using gene therapy for the treatment of either MPS I or MPS VI that has entered 
clinical trials.                                                                

Vibrilase for debridement of serious burns                                  

Other enzymatic products exist which might be possibly used for the       
debridement of serious second or third degree burns. Those products in their    
current form have not captured any meaningful share of the debridement function 
in the treatment of burn patients. BioMarin knows of no clinical program of a   
new enzymatic product for the debridement of serious burns. The primary         
competition for Vibrilase continues to be surgical debridement.                 

See "Factors that May Affect Future Results--If BioMarin fails to compete 
successfully, its revenues and operating results will be adversely affected."   

Employees                                                                       

As of June 28, 2002, BioMarin had 249 full-time employees, 132 of whom are
in operations, 89 of whom are in research and development and 28 of whom are in 
administration.                                                                 

BioMarin considers its employee relations to be good. BioMarin's employees
are not covered by a collective bargaining agreement. BioMarin has not          
experienced employment related work stoppages. BioMarin cannot provide any      
assurance that it will be able to continue attracting qualified personnel in    
sufficient numbers to meet its needs.                                           

Directors of BioMarin                                                           

 The current directors of BioMarin are Fredric D. Price, Franz L. Cristiani,
Phyllis I. Gardner, M.D., Erich Sager, Vijay B. Samant and Gwynn R. Williams.   
For certain information regarding these persons, see the section entitled "The  
Annual Meeting of BioMarin Stockholders--Proposal One: Election of Directors."  

111 

DEFM14A
125th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 125th
Executive Officers and Other Significant Employees of BioMarin                  

The following table sets forth certain information concerning BioMarin's  
executive officers (other than Fredric D. Price) and other significant          
employees as of June 28, 2002.                                                  

                                                        [Enlarge/Download Table]

             Name               Age              Position with BioMarin              
             ----               ---              ----------------------              
                                                                                     
Christopher M. Starr, Ph.D..... 50  Senior Vice President, Research and Development  
Emil D. Kakkis, M.D., Ph.D..... 42  Senior Vice President, Scientific Affairs        
Robert A. Baffi, Ph.D.......... 47  Vice President, Quality Assurance/Quality Control
Brian K. Brandley, Ph.D........ 45  Vice President, Pharmacology and Toxicology      
Reinhard Gabathuler, Ph.D...... 48  Vice President, Brain Research                   
Robert A. Heft, Ph.D........... 47  Vice President, Product Development              
John L. Jost, Ph.D............. 58  Vice President, Manufacturing                    
Jeffrey I. Landau.............. 59  Vice President, Administration                   
Matthew R. Patterson........... 31  Vice President, Regulatory and Government        
                                      Affairs                                        
Stuart J. Swiedler, M.D., Ph.D. 46  Vice President, Clinical Affairs                 
Kim R. Tsuchimoto, C.P.A....... 39  Vice President, Controller                       

Christopher M. Starr, Ph.D., Co-Founder and Senior Vice President, Research 
And Development                                                             

  Dr. Starr co-founded BioMarin and currently serves as Senior Vice President,
Research and Development since January 2002. He served as a Vice President,     
Research and Development from April 1998 to January 2002. From July 1991 to     
April 1998, Dr. Starr served as Vice President, Research and Development for    
Glyko, Inc. Prior to that, Dr. Starr was a National Research Council Associate  
at the National Institutes of Health (NIH). He has published numerous           
peer-reviewed articles, including research papers on Fluorophore-Assisted       
Carbohydrate Electrophoresis (FACE) in the diagnosis of lysosomal storage       
diseases and in the identification of patients with MPS I. His work in the      
development of diagnostic tests for lysosomal storage diseases has been funded  
by several grants from the NIH and other institutions. Dr. Starr holds a Ph.D.  
in biochemistry and molecular biology from the State University of New York     
Health Science Center and a B.S. from Syracuse University.                      

Emil D. Kakkis, M.D., Ph.D., Senior Vice President, Scientific Affairs      

Dr. Kakkis serves as BioMarin's Senior Vice President, Scientific Affairs 
since January 2002. He served as a Vice President of BioMarin from September    
1998 to January 2002. In 1996, together with his colleague, Elizabeth F.        
Neufeld, Ph.D., of the University of California at Los Angeles (UCLA), Dr.      
Kakkis developed Aldurazyme, a recombinant form of (alpha)-L-iduronidase, the   
enzyme deficient in MPS I patients. From July 1994 to August 1998, Dr. Kakkis   
held the position of Assistant Professor at the Harbor-UCLA Medical Center,     
Division of Genetics, Department of Pediatrics. From June 1991 to July 1994,    
Dr. Kakkis completed a fellowship in genetics at the UCLA Intercampus Medical   
Genetics training program and, prior to that, conducted his pediatric residency 
at the Harbor-UCLA Medical Center. Dr. Kakkis is the author of numerous         
published articles and abstracts on MPS I and (alpha)-L-iduronidase. He holds   
an M.D. and a Ph.D. in biological chemistry from the Medical Scientist training 
program at the UCLA School of Medicine. Dr. Kakkis is board-certified in        
pediatrics and medical genetics.                                                

 Robert A. Baffi, Ph.D., Vice President, Quality Assurance and Quality Control

  Dr. Baffi joined BioMarin as Vice President of Quality Assurance and Quality
Control in May 2000. From February 1986 to May 2000, Dr. Baffi served in a      
number of progressively more responsible positions at Genentech, Inc., a        
biotechnology company, primarily in the functional area of quality control.     
Prior to Genentech, Dr. Baffi worked for Cooper BioMedical as a research        
scientist and at Becton Dickinson Research Center as a post-doctoral fellow.    
Dr. Baffi has contributed to more than 20 major regulatory submissions for      

112 

DEFM14A
126th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 126th
product approval in the United States and Europe and to more than 50 regulatory 
submissions for investigational new drug testing. Dr. Baffi received a Ph.D. in 
biochemistry, as well as an M.Phil. and a B.S. in biochemistry from the City    
University of New York.                                                         

Brian K. Brandley, Ph.D, Vice President, Pharmacology and Toxicology        

 Dr. Brandley has served as a Vice President of BioMarin since October 1998.
Dr. Brandley served as the Managing Director of Glyko Inc. since April 1998.    
From July 1995 to April 1998, Dr. Brandley served as Assistant Professor in the 
Department of Pharmacology at Rush University. Dr. Brandley served as Senior    
Scientist and Head of the Cell Biology Laboratory at Glycomed, Incorporated, a  
biotechnology company, from July 1988 to July 1995. He also has five years of   
post-doctoral research experience at the Medical University of South Carolina   
and the Johns Hopkins University School of Medicine. Dr. Brandley is the author 
of 27 publications in peer-reviewed journals and holds 14 patents. He earned a  
Ph.D. in biology from the University of Sydney, an M.S. in biology from the     
University of Miami, and a B.S. with honors from the University of Miami.       

Reinhard Gabathuler, Ph.D., Vice President, Brain Research                  

  Dr. Gabathuler has served as Vice President, Brain Research since March 2002
when BioMarin acquired Synapse Technologies Inc. Prior to joining BioMarin, Dr. 
Gabathuler served as Vice President, Research at Synapse Technologies Inc.      
since May 2001 and Director of Blood-Brain Barrier Research at Synapse          
Technologies Inc. from June 1998 to May 2001. From September 1993 to June 1998, 
Dr. Gabathuler served as a consultant for Synapse Technologies Inc. From June   
1991 to June 1998, Dr. Gabathuler served as Senior Research Associate at        
Biotechnology Laboratory at the University of British Columbia. Dr. Gabathuler  
holds a Ph.D. in biochemistry from the University of Lausanne, Switzerland. Dr. 
Gabathuler completed Post-Doctoral research at the University of Washington,    
the Swiss Institute for Experimental Cancer Research in Lausanne and the Ludwig 
Institute for Cancer Research in Stockholm, Sweden.                             

Robert A. Heft, Ph.D., Vice President, Product Development                  

Dr. Heft has served as Vice President, Product Development since October  
2001 when BioMarin acquired the pharmaceutical assets of IBEX Technologies Inc. 
In January 1986, Dr. Heft founded IBEX and was its President and Chief          
Scientist until joining BioMarin. While at IBEX, Dr. Heft directed the          
preclinical and clinical development of several enzymes for cardiovascular      
disease and metabolic disorders, was awarded several patents for work related   
to these enzymes, and authored related papers. Dr. Heft is a member of the      
Board of Directors of the Canadian Genetic Diseases Network. Dr. Heft received  
a Bachelor of Mechanical Engineering from McGill University and a Masters       
degree in nuclear engineering from Cornell University before obtaining his      
Ph.D. from the Massachusetts Institute of Technology in genetic                 
engineering/radiological sciences.                                              

John L. Jost, Ph.D., Vice President, Manufacturing                          

 Dr. Jost joined BioMarin as Vice President, Manufacturing in June 1999. Dr.
Jost devoted his time from November 1997 to June 1999 to personal affairs. From 
February 1983 to November 1997, Dr. Jost held a variety of management and       
scientific positions at Genentech, Inc., a biotechnology company. During his    
tenure at Genentech, Dr. Jost also led a variety of development projects        
focusing on products such as Tumor Necrosis Factor (TNF), Gamma Interferon,     
Human Growth Hormone (hGH), animal interferons, and human serum albumin. These  
programs contributed to numerous investigational new drug applications (IND),   
new drug applications (NDA), BLA, and BLA supplement submissions. From 1971 to  
1983, Dr. Jost served in various scientific positions in process development at 
The Upjohn Company, culminating in his role as a senior research scientist. Dr. 
Jost received a Ph.D. and B.S. in chemical engineering from the University of   
Minnesota.                                                                      

113 

DEFM14A
127th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 127th
Jeffrey I. Landau, Vice President, Administration                           

  Mr. Landau joined BioMarin as a consultant in October 2001 and has served as
Vice President, Administration since April 2002. From March 2000 to October     
2001, Mr. Landau served as Chief Operating Officer for Transition/1 Management  
Accounting Systems, Inc., a computer software company. From December 1999 to    
March 2000, Mr. Landau acted as an independent consultant. From June 1998 to    
December 1999, Mr. Landau served as Chief Operating Officer for GlobeNet        
Technologies, Inc., a computer software company. From March 1996 to June 1998,  
Mr. Landau served as Chief Information Officer for Walt Disney Consumer         
Products. Mr. Landau received an M.S. in computer science and operations        
research, and a B.S. in mathematics from New York University.                   

Matthew R. Patterson, Vice President, Regulatory and Government Affairs     

Mr. Patterson was promoted to Vice President, Regulatory and Government   
Affairs from Director, Regulatory Affairs in January 2002, having joined        
BioMarin in August 1998. He served as Regulatory Affairs Manager from August    
1998 to July 1999, and as Director of Regulatory Affairs from July 1999 to      
January 2002. Prior to joining BioMarin, Mr. Patterson worked for Genzyme       
Corporation, a biotechnology company, first in Manufacturing (from December     
1993 to May 1995) and then Regulatory Affairs (from May 1995 to July 1998),     
where he contributed to the development and global licensing of multiple        
biotechnology products. Mr. Patterson received a B.A. in biochemistry from      
Bowdoin College.                                                                

Stuart J. Swiedler, M.D., Ph.D., Vice President, Scientific and Clinical    
Affairs                                                                     

Dr. Swiedler has served as Vice President, Clinical Affairs of BioMarin   
since June 1998. From November 1997 to June 1998, Dr. Swiedler was an           
independent technology consultant. From May 1995 to November 1997, Dr. Swiedler 
served as Vice President, Research Programs at Glycomed, Incorporated, a        
biotechnology company. Dr. Swiedler's biotechnology experience includes six     
years of post-doctoral work at the Yale University and Duke University schools  
of medicine. He is board-certified in anatomic pathology and has conducted      
extensive research in the molecular biology of carbohydrate enzymes. Dr.        
Swiedler holds five patents and is the author of 20 peer-reviewed journal       
articles. Dr. Swiedler holds a Ph.D. from the Johns Hopkins University School   
of Medicine, Biochemistry, Cellular, and Molecular Biology training program, an 
M.D. from the Johns Hopkins School of Medicine, and a B.S. from the State       
University of New York at Albany.                                               

Kim R. Tsuchimoto, C.P.A., Vice President, Controller                       

Ms. Tsuchimoto was promoted to Vice President, Controller in January 2002,
having joined BioMarin in February 1997 as BioMarin's Controller. From November 
1993 to November 1996, Ms. Tsuchimoto served as Controller for Dodd Smith Dann  
Inc., a fundraising and marketing consultant for non-profit organizations.      
Prior to that, Ms. Tsuchimoto served as Controller from January 1990 to October 
1993 and Assistant Controller from January 1988 to January 1990 for Partech     
International (formerly Paribas Technology), a venture capital firm affiliated  
with Banque Paribas. Ms. Tsuchimoto is a licensed California certified public   
accountant and received a B.S. in business administration from San Francisco    
State University.                                                               

Security Ownership Of Certain Beneficial Owners                                 

The following table sets forth certain information with respect to the    
beneficial ownership of BioMarin's common stock as of July 27, 2002 as to (i)   
each person, or group of affiliated persons, who is known by BioMarin to own    
beneficially more than 5% of BioMarin's common stock; (ii) each of BioMarin's   
directors; (iii) each of BioMarin's executive officers named in the Summary     
Compensation Table set forth herein under the caption "Executive and Director   
Compensation"; and (iv) all of BioMarin's directors and current executive       
officers as a group.                                                            

114 

DEFM14A
128th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 128th
Except as otherwise noted, the persons or entities in this table have sole
voting and investing power with respect to all the shares of BioMarin's common  
stock beneficially owned by them subject to community property laws, where      
applicable. The information with respect to each person specified is as         
supplied or confirmed by such person, based upon statements filed with the U.S. 
Securities and Exchange Commission, or based upon the actual knowledge of       
BioMarin.                                                                       

                                                        [Enlarge/Download Table]

                                                          Number of Shares      Number of Shares    Percentage of
               Name of Beneficial Owner                 Beneficially Owned(1) Subject To Options(2) Common Stock 
               ------------------------                 --------------------- --------------------- -------------
                                                                                                                 
Glyko Biomedical Ltd...................................      11,367,617                     0           21.3%    
 Box 25, Commerce Court West                                                                                     
 199 Bay Street                                                                                                  
 Toronto, Ontario                                                                                                
 Canada M5L 1A9                                                                                                  

Franklin Resources Inc.................................       3,246,245                     0            6.0%    
 One Franklin Parkway                                                                                            
 San Mateo, CA 94403                                                                                             

Fredric D. Price(3)....................................         395,597               370,597              *     

Brian K. Brandley, Ph.D.(3)............................          94,403                93,774              *     

Robert A. Baffi, Ph.D.(3)..............................         151,884               150,396              *     

Franz L. Cristiani(3)..................................               0                     0             --     

Phyllis L. Gardner, M.D.(3)............................          15,000                15,000              *     

John L. Jost, Ph.D.(3).................................         194,344               187,628              *     

Emil D. Kakkis, M.D., Ph.D.(3).........................         280,722               272,921              *     

Erich Sager(3)(4)......................................      11,589,017               142,500           21.6%    

Vijay B. Samant(3).....................................               0                     0             --     

Christopher M. Starr, Ph.D.(3).........................         691,989               311,775            1.3%    

Stuart J. Swiedler, M.D., Ph.D.(3).....................         183,823               173,823              *     

Gwynn R. Williams(3)...................................          72,500                72,500              *     

All current executive officers and directors as a group                                                          
  (8 persons)(4).......................................      13,044,826             1,185,293           24.3%    

--------                                                                        
* Represents less than 1% of BioMarin's outstanding common stock.             

(1) The "Number of Shares Beneficially Owned" column is based on shares of      
 common stock outstanding at June 27, 2002. Shares of common stock subject
   to options or warrants that are exercisable within 60 days of June 27, 2002
(the "Number of Shares Beneficially Owned") are deemed to be outstanding
  and to be beneficially owned by the person holding the options or warrants
   for the purpose of computing the percentage ownership of the person but are
not treated as outstanding for the purpose of computing the percentage  
ownership of any other person.                                          

(2) The "Number of Shares Subject to Options" enumerates for each 5%            
  stockholder, director and Named Executive Officer and for all officers and
 directors in the aggregate, the shares of common stock subject to options
exercisable within 60 days of June 27, 2002. These shares are in the    
 calculation of the "Number of Shares Beneficially Owned." This table does
   not include the beneficial ownership of shares held by Raymond W. Anderson,
BioMarin's former Chief Operating Officer, Chief Financial Officer,     
 Secretary and Vice President, Finance and Administration who has not been
employed by BioMarin since January 2002.                                

(3) The mailing address for such stockholder is c/o BioMarin Pharmaceutical     
Inc., 371 Bel Marin Keys Blvd., Suite 210, Novato, California 94949.    

(4) Includes 11,367,617 shares held by Glyko of which Mr. Sager is an officer.  
Mr. Sager disclaims beneficial ownership of these shares, except to the 
extent of his pecuniary interest.                                       

115 

DEFM14A
129th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 129th
 For pro forma ownership of BioMarin's common stock following the completion
of the transaction, see table under "The Companies After The Transaction--Pro   
Forma Security Ownership of Certain Beneficial Owners."                         

Executive and Director Compensation                                             

Summary Compensation Table                                                  

BioMarin is required by the U.S. Securities and Exchange Commission to    
disclose compensation awarded to, earned by, or paid for services rendered to   
it in all capacities during the last three fiscal years to (i) its Chief        
Executive Officer; (ii) its four most highly compensated executive officers,    
other than the Chief Executive Officer, who were serving as executive officers  
at the end of fiscal year 2001; and (iii) up to two additional individuals for  
whom such disclosure would have been provided under clause (i) and (ii) above   
but for the fact that the individual was not serving as an executive officer of 
BioMarin at the end of fiscal year 2001; provided, however, that no disclosure  
need be provided for any executive officer, other than the CEO, whose total     
annual salary and bonus does not exceed $100,000.                               

Accordingly, the following table discloses compensation paid by BioMarin  
during the last three fiscal years to (i) Fredric D. Price, its Chief Executive 
Officer; and (ii) Raymond W. Anderson, Christopher M. Starr, Ph.D., Emil D.     
Kakkis, M.D., Ph.D. and John L. Jost, Ph.D., the four most highly-compensated   
executive officers, other than the Chief Executive Officer, who were serving as 
executive officers at the end of fiscal year 2001 and whose salary and bonus    
exceeded $100,000. BioMarin refers to all of these officers as the "Named       
Executive Officers."                                                            

116 

DEFM14A
130th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 130th
The entries under the column "Other Annual Compensation" for Mr. Price,   
include the value of his restricted stock grant issued upon his employment      
commencement, a tax gross-up benefit relating to the compensation earned from   
the restricted stock grant and payments for temporary housing. Each of these    
amounts paid to Mr. Price is described in more detail in the section captioned  
"Employment Agreements." The entries under the column "All Other Compensation"  
in the table represent the premiums paid for life insurance benefits and vested 
401(k) matching for each Named Executive Officer.                               

Summary Compensation Table  

                                                        [Enlarge/Download Table]

                                                                                    Long-Term                     
                                                                                   Compensation                   
                                                    Annual Compensation               Awards                      
                                           ------------------------------------- ----------------                 
                                                                                    Securities                    
                                                                  Other annual      Underlying       All Other    
    Name and Principal Position       Year Salary ($) Bonus ($) compensation ($) Options/SARs (#) Compensation ($)
    ---------------------------       ---- ---------- --------- ---------------- ---------------- ----------------
                                                                                                                  
Fredric D. Price(1).................. 2001  408,269    278,500           --          175,000              989     
  Chairman and Chief Executive        2000   99,487    100,000      578,424          523,288               --     
  Officer                             1999       --         --           --               --               --     
Christopher M. Starr, Ph.D(2)........ 2001  250,000         --           --           25,000            2,294     
  Senior Vice President, Research     2000  190,000     75,000           --           75,194            1,614     
  and Development                     1999  150,000    150,000           --           94,189              876     
Emil D. Kakkis, M.D., Ph.D.(2)....... 2001  245,000         --           --           25,000            1,869     
  Senior Vice President, Scientific   2000  229,327     50,000           --           50,000            1,009     
  Affairs                             1999  225,000         --           --           64,502              336     
Stuart J. Swiedler, M.D., Ph.D. (2).. 2001  230,000         --           --           20,000            1,869     
  Vice President, Scientific and      2000  192,769         --           --           45,233            1,317     
  Clinical Affairs                    1999  154,000         --           --           32,661              624     
Raymond W. Anderson(2)(3)............ 2001  250,000         --           --            5,000           15,908     
  Former Chief Operating Officer,     2000  222,466     25,000           --           58,469            1,893     
  Chief Financial Officer,            1999  189,625    100,000           --           72,658            2,352     
  Secretary and Vice President,                                                                                   
  Finance and Administration                                                                                      

--------                                                                        
(1) Mr. Price was appointed as the Chief Executive Officer effective October    
31, 2000.                                                               

(2) Options were earned for the fiscal year 2001 and granted on December 14,    
2001. Long-term options vest 6/48ths at June 30, 2002 and  1/48ths per  
   month thereafter. No short-term options were granted during the fiscal year
2001.                                                                   

(3) As of January 2002, Mr. Anderson is no longer employed by BioMarin in any   
   capacity. A portion of "All Other Compensation" was paid to Mr. Anderson in
 January 2002, relating to his accrued vacation at the time of termination
of his employment.                                                      

117 

DEFM14A
131st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 131st
Stock Option Grants Table                                                   

  The following table sets forth certain information for each grant of options
to purchase BioMarin's common stock during fiscal 2001 to each of the Named     
Executive Officers. Except as otherwise noted, all these options were granted   
under the 1997 Stock Plan and have a term of 10 years subject to early          
termination in the event the officer's services to the Company cease.           

Fiscal 2001 Stock Option Grants 

                                                        [Enlarge/Download Table]

                                                                                  Potential Realizable   
                                                                                  Value at Assumed Annual
                                Number of   Percent of   Exercise                 Rates of Stock Price   
                                Securities Total Options  Price                   Appreciation for Option
                                Underlying  Granted to     Per                        Term ($)(3)        
                                 Options   Employees in   Share     Option Term   -----------------------
             Name                Granted      2001(1)     ($)(2)  Expiration Date    5%          10%     
             ----               ---------- ------------- -------- ---------------  ---------   --------- 
                                                                                                         

Fredric D. Price...............  175,000        10%       13.24      12/14/11     1,457,149   3,692,701  

Christopher M. Starr, Ph.D.....   25,000         1%       13.24      12/14/11       208,164     527,529  

Emil D. Kakkis, M.D., Ph.D.....   25,000         1%       13.24      12/14/11       208,164     527,529  

Stuart J. Swiedler, M.D., Ph.D.   20,000         1%       13.24      12/14/11       166,531     422,023  

Raymond W. Anderson(4).........    5,000         *        13.24      12/14/11        41,633     105,506  

--------                                                                        
* Represents less than 1% of the total options granted to BioMarin employees  
in 2001.                                                                  

(1) Based on an aggregate of 1,801,681 shares subject to options granted by     
BioMarin during fiscal year 2001 to employees, consultants and the Named
Executive Officers.                                                     

(2) Options were granted at an exercise price equal to the greater of the       
closing price of the BioMarin common stock on Nasdaq on the date of the 
grant or January 2, 2002.                                               

(3) The 5% and 10% assumed annual rates of compounded stock price appreciation  
 are mandated by rules of the Securities and Exchange Commission. BioMarin
cannot assure any Named Executive Officer or any other holder of its    
securities that the actual stock price appreciation over the option term
will be at the assumed 5% and 10% levels or at any other defined level. 
Unless the market price of its common stock appreciates over the option 
term, no value will be realized from the option grants made to the Named
Executive Officers. The potential realizable value is calculated by     
  assuming that the closing price per share on the date of grant appreciates
   at the indicated rate for the entire term of the option and that the option
  is exercised at the exercise price and sold on the last day of its term at
   the appreciated price. The potential realizable value computation is net of
the applicable exercise price, but does not take into account applicable
federal or state income tax consequences and other expenses of option   
 exercises or sales of appreciated stock. The values shown do not consider
  non-transferability or termination of the options upon termination of such
employee's employment with BioMarin.                                    

(4) Pursuant to the terms of Mr. Anderson's separation agreement, these options 
will expire on December 31, 2002 unless sooner exercised.               

118 

DEFM14A
132nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 132nd
Fiscal Year Option Exercises and Option Value Table                         

The following table sets forth the number of shares covered by both       
exercisable and unexercisable stock options held by each of the Named Executive 
Officers at December 31, 2001.                                                  

Options Exercised During Year 2001 and Fiscal Year-End Option Value Table 

                                                        [Enlarge/Download Table]

                                                       Number of Securities      Value of Unexercised   
                                                      Underlying Unexercised     In-the-Money Options   
                                  Shares     Value      Options at Year-End         at Year-End(2)      
                                 Acquired   Realized ------------------------- -------------------------
   Name of Executive Officer    on Exercise  ($)(1)  Exercisable Unexercisable Exercisable Unexercisable
   -------------------------    ----------- -------- ----------- ------------- ----------- -------------
                                                                                                        
Fredric D. Price...............       --         --    252,107      321,181    $  269,970    $348,785   
Christopher M. Starr, Ph.D.....   17,597    184,945    281,567       70,834    $2,003,818    $315,545   
Emil D. Kakkis, M.D., Ph.D.....       --         --    229,084       85,418    $1,823,133    $423,529   
Stuart J. Swiedler, M.D., Ph.D.       --         --    139,169       66,797    $1,005,284    $335,254   
Raymond W. Anderson(3).........       --         --    244,959       79,168    $1,914,186    $358,280   

--------                                                                        
(1) Based on closing price on December 3, 2001, the date of exercise of $11.50  
per share less exercise price per share.                                
(2) Based on closing price on December 31, 2001 of $13.44 per share less        
exercise price per share.                                               
(3) As of January 2002, Mr. Anderson is no longer employed by BioMarin in any   
capacity.                                                               

Employment Agreements                                                       

BioMarin is party to employment agreements with each current executive    
officer on the terms enumerated on the chart below. Each of these employment    
agreements is terminable without cause by BioMarin upon six months prior        
written notice to the officer, or by the officer upon three months prior        
written notice to BioMarin. BioMarin is obligated to pay the officer's salary   
and benefits until this termination. Except in the case of Mr. Price, in the    
event that the officer is involuntarily terminated within one year of a change  
of control of BioMarin, he will receive (i) a severance payment equal to six    
months of his annual salary; (ii) a bonus equal to 50% of the annual bonus that 
he would otherwise be entitled to, and (iii) immediate vesting of 50% of the    
unvested portion of his outstanding options to purchase BioMarin common stock.  

                                                        [Enlarge/Download Table]

                             2001 Annual                         Initial Grant of Right to     Agreement    
 Name of Executive Officer  Salary Rate(1)     Annual Bonus      Purchase Equity Securities Termination Date
 -------------------------  -------------- --------------------- -------------------------- ----------------
                                                                                                            
Fredric D. Price...........    $450,000    Annual bonus,         Option to purchase up to   October 30, 2003
                                            payable in cash       500,000 shares of                         
                                            based on              BioMarin's common                         
                                            performance.          stock at a purchase price                 
                                                                  of $12.50 per share.                      

Christopher M. Starr, Ph.D.    $250,000    Annual bonus,         400,000 shares of          June 26, 2003   
                                            payable in cash       BioMarin's common                         
                                            or stock.             stock at a purchase price                 
                                                                  of $1.00 per share.                       

Emil D. Kakkis, M.D., Ph.D.    $245,000    Eligible to receive a Option to purchase up to   None            
                                            cash bonus based      200,000 shares of                         
                                            on achievement        BioMarin's common                         
                                            of milestones and     stock at a purchase price                 
                                            an annual bonus,      of $4.00 per share.                       
                                            payable in cash                                                 
                                            or stock.                                                       

119 

DEFM14A
133rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 133rd
                                                        [Enlarge/Download Table]

                              2001 Annual                    Initial Grant of Right to     Agreement    
 Name of Executive Officer   Salary Rate(1)   Annual Bonus   Purchase Equity Securities Termination Date
 -------------------------   -------------- ---------------- -------------------------- ----------------
                                                                                                        

Stuart Swiedler, M.D., Ph.D.    $230,000    Annual bonus,    Option to purchase up to         None      
                                             payable in cash  150,000 shares of                         
                                             or stock.        BioMarin's common                         
                                                              stock at a purchase price                 
                                                              of $4.00 per share.                       

Robert A. Baffi, Ph.D.......    $220,000    Annual bonus,    Option to purchase up to         None      
                                             payable in cash  210,000 shares of                         
                                             or stock.        BioMarin's common                         
                                                              stock at a purchase price                 
                                                              of $22.00 per share.                      

John L. Jost, Ph.D..........    $220,000    Annual bonus,    Option to purchase up to         None      
                                             payable in cash  200,000 shares of                         
                                             or stock.        BioMarin's common                         
                                                              stock at a purchase price                 
                                                              of $13.00 per share.                      

Brian K. Brandley, Ph.D.....    $155,000    Annual bonus,    Option to purchase up to         None      
                                             payable in cash  150,000 shares of                         
                                             or stock.        Glyko's common stock.                     
                                                              Now exercisable for                       
                                                              65,415 shares of                          
                                                              BioMarin's common                         
                                                              stock at a purchase price                 
                                                              of $5.27 per share.                       

--------                                                                        
(1) 2001 Annual Salary Rate reflected in the above table reflects 2001 annual   
salary rate as of December 31, 2001. The table entitled "Summary        
Compensation Table" reflects actual salaries paid in 2001 and includes  
mid-year salary adjustments.                                            

Effective October 31, 2000, in connection with Mr. Price's employment,    
BioMarin entered into an employment agreement with him which provides for an    
initial payment to Mr. Price of $357,624, an annual base salary of $400,000 in  
the first year, $450,000 in the second year, and $500,000 in the third year,    
and a bonus of $200,000 in the first year and a performance bonus of between    
25% and 100% of his respective annual base salary for each of the second and    
third years. In addition, BioMarin granted Mr. Price 25,000 restricted shares   
of BioMarin's common stock (which vest in three equal annual installments       
commencing on January 1, 2001), BioMarin granted Mr. Price an option to         
purchase 500,000 shares of its stock, at a purchase price of $12.50 per share   
(which vests monthly over 36 months, commencing October 30, 2000) and BioMarin  
further agreed to grant Mr. Price additional options on each anniversary of the 
agreement, in an amount to be determined by the Board. BioMarin also agreed to  
reimburse Mr. Price for all expenses incurred in relocating to the area with a  
tax gross-up adjustment and to extend him a $1,500,000 interest-deferred loan   
for the purchase of a house.                                                    

The agreement has a three-year term, which will automatically renew for an
additional three-year period unless either Mr. Price or BioMarin give the other 
notice of its/his intent not to renew the agreement. If BioMarin decides not to 
renew the agreement, BioMarin must pay Mr. Price an amount such that BioMarin's 
net payment after deduction of all payroll taxes and all income taxes at the    
highest marginal rates applicable to Mr. Price will equal the base salary and   
bonus BioMarin paid him in the third year of the agreement. Additionally, the   
expiration for any vested options will be one year from the termination of the  
agreement and all unvested options will remain unvested and unexercisable.      

 Either party can terminate the agreement on sixty days' notice. However, in
the event there is a change in control which results in Mr. Price's actual or   
constructive termination, he is entitled to a severance payment equal to twice  
the aggregate of his annual base salary and bonus payable in the year in which  
termination occurs,                                                             

120 

DEFM14A
134th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 134th
forgiveness of all outstanding principal and interest on the interest-deferred  
loan, acceleration of the full unvested portion of his 25,000 share restricted  
stock grant and all stock options and an additional payment equal to            
Mr. Price's maximum total income tax liability applicable to the total          
severance package. If Mr. Price is terminated other than for cause, he is       
entitled to receive a severance payment equal to twice his applicable annual    
base salary and bonus if he is terminated in the first year of the agreement    
and equal to his applicable annual base salary and bonus if he is terminated in 
a subsequent year, forgiveness of all outstanding principal and interest on the 
interest deferred-loan and acceleration of the full unvested portion of his     
25,000 share restricted stock grant and all stock options. Additionally, if he  
is terminated other than for cause prior to the second anniversary of the       
agreement, he is entitled to an additional payment equal the maximum income tax 
liability associated with forgiveness of the loan and such additional payment.  

BioMarin provided a three-year loan to Dr. Starr for the purchase of his  
shares referenced in column four of the table above and to Mr. Denison for the  
purchase of 1,300,000 shares of the Company's common stock all of which were    
purchased pursuant to the Founders' Stock Purchase Agreement described below.   
Each loan bears interest at a rate of 6%. For each of them, respectively, if    
his employment is terminated by BioMarin for any reason, he has the right to    
sell any or all of these shares of common stock to BioMarin at a price per      
share equal to the lesser of the then-current per share market price of the     
shares or the original per share purchase price of $1.00.                       

 Dr. Brandley's employment agreement was originally with Glyko, Inc. but was
assigned to BioMarin in connection with BioMarin's acquisition of Glyko, Inc.   

Through June 30, 2000, Dr. Starr's cash bonus was based on the difference 
between a minimum market capitalization and BioMarin's quarterly market         
capitalization. The cash bonus is calculated as follows:                        

 The Board of Directors established a minimum market capitalization of $20.0
million for the first quarter of 1998. The minimum market capitalization        
increases by $1.0 million per quarter until the end of the agreement in the     
second quarter of 2000. BioMarin's quarterly market capitalization is           
calculated at the end of each calendar quarter by multiplying the number of     
BioMarin's common shares outstanding times the average closing price of         
BioMarin's common stock for the last 10 trading days of the quarter. If         
BioMarin's common stock is not publicly traded the quarterly market             
capitalization is determined by multiplying the shares of BioMarin's common     
stock outstanding by the price at which BioMarin's common stock was sold in the 
latest significant investment by an independent third-party investor. For each  
full $5.0 million that the quarterly market capitalization exceeds the minimum  
market capitalization, Dr. Starr received a cash bonus of $1,200 in the first   
calendar quarter and $1,250 in the second quarter. Dr. Starr's cash bonus is    
the sum of the two quarterly bonuses for 2000.                                  

Dr. Starr's total cash bonus was limited to 100% of his base salary in any
year. Additional amounts beyond the cash limit that may be earned in a year     
were paid in stock options using the Black-Scholes option pricing model to      
calculate the value of the stock option based on period-end parameters.         

 In December 1998, the Board approved a form of indemnification agreement to
be entered into between BioMarin and each of its officers and directors. This   
indemnification agreement requires BioMarin, among other things, to indemnify   
officers and directors against liabilities that may arise by reason of their    
status or performance of their duties as officers or directors and to advance   
their expenses incurred as a result of any proceeding against them as to which  
they could be indemnified.                                                      

 For a description of other transactions between BioMarin and its affiliates
of the Company, see "Certain Relationships and Related Transactions."           

121 

DEFM14A
135th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 135th
Section 162(m)                                                              

BioMarin has considered the potential future effects of Section 162(m) of 
the Internal Revenue Code on the compensation paid to its executive officers.   
Section 162(m) disallows a tax deduction for any publicly held corporation for  
individual compensation exceeding $1.0 million in any taxable year for any of   
the Named Executive Officers, unless compensation is performance-based.         
BioMarin has adopted a policy that, where reasonably practicable, it will seek  
to qualify the variable compensation paid to its executive officers for an      
exemption from the deductibility limitations of Section 162(m).                 

Director Compensation                                                       

Directors do not receive cash compensation for their services as directors
of BioMarin but are reimbursed for their reasonable expenses in attending       
meetings of the Board and while performing services for BioMarin. In October    
2001, under the 1998 Director Option Plan, BioMarin issued to Mr. Denison       
options to purchase 15,000 shares of common stock with an exercise price set at 
the fair market value (closing price of common stock on Nasdaq) on the date of  
grant, which was $11.40. In November 2001, under the 1998 Director Option Plan, 
BioMarin issued to Messrs. Sager and Williams options to purchase 15,000 shares 
of common stock with an exercise price set at the fair market value (closing    
price of common stock on Nasdaq) on the date of grant, which was $12.00 as      
consideration for their ongoing services to BioMarin as directors. In September 
2001, under the 1998 Director Option Plan, BioMarin issued to Dr. Gardner       
option to purchase 20,000 shares of common stock with an exercise price set at  
the fair market value (closing price of common stock on Nasdaq) on the date of  
grant, which was $12.34, as consideration for her initial year of services to   
BioMarin as a director.                                                         

1998 Director Option Plan                                                   

 The 1998 Director Option Plan was adopted by the Board in December 1998. It
was approved by BioMarin's stockholders as of January 15, 1999. The plan        
provides for the grant of nonstatutory stock options to non-employee directors. 
A total of 500,000 shares of BioMarin common stock have been reserved for       
issuance under the plan. The plan also provides for an annual increase in this  
number of shares equal to the lesser of: (1) 0.5% of the BioMarin's outstanding 
capital stock, (2) 200,000 shares, or (3) a lesser amount determined by the     
Board.                                                                          

In fiscal year 2001, options to purchase, in the aggregate, 65,000 shares 
were issued to directors.                                                       

  The 1998 Director Option Plan provides that each non-employee director shall
automatically be granted an option to purchase 20,000 shares of BioMarin common 
stock on the date which that person first becomes a non-employee director. This 
option shall have a term of 10 years. The shares subject to this initial option 
shall vest quarterly over one year. Each non-employee director shall thereafter 
also be automatically granted an option to purchase 15,000 shares of BioMarin   
common stock on the first anniversary of the date of their respective initial   
appointments to the Board and each anniversary thereafter, provided that he or  
she retains the Board seat on his or her anniversary date. The shares subject   
to this annual option shall vest in full one year from the date of grant and    
shall have a term of 10 years. These options shall continue to vest quarterly   
only while the director serves. The exercise price per share of each of these   
options shall be 100% of the fair market value of a share of BioMarin common    
stock at the date of the grant of the option.                                   

In the event of a merger or the sale of substantially all of the assets of
BioMarin, each option may be assumed or substituted by the successor            
corporation. If an option is assumed or substituted, it shall continue to vest  
as provided in the plan. However, if a non-employee director's status as a      
director of BioMarin or the successor corporation, as applicable, is            
terminated, other than upon a voluntary resignation by the non-employee         
director, the option shall immediately become fully vested and exercisable. If  
the successor corporation does not agree to assume or substitute the option,    
each option shall become fully vested and exercisable for a period of 30 days   
from the date the Board notifies the optionee of the option's full              
exercisability, after which period the option shall terminate.                  

122 

DEFM14A
136th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 136th
 Options granted under the plan must be exercised within three months of the
end of the optionee's tenure as a director, or within 12 months after           
termination by death or disability, but in no event later than the expiration   
of the option's ten-year term. No option granted under the plan is transferable 
by the optionee other than by will or the laws of descent or distribution. Each 
option is exercisable, during the lifetime of the optionee, only by the         
optionee. Unless sooner terminated by the Board, the plan will terminate        
automatically 10 years from the effective date of the plan.                     

Equity Compensation Plans                                                   

The following table provides certain information with respect to all of   
BioMarin's equity compensation plans in effect as of December 31, 2001.         

Equity Compensation Plan Information  

                                                        [Enlarge/Download Table]

                                                        Number of securities  Weighted average  Number of securities 
                                                         to be issued upon    exercise price of  remaining available 
                                                            exercise of          outstanding     for future issuance 
                                                        outstanding options,  options, warrants     under equity     
Plan Category                                          warrants and rights(1)    and rights     compensation plans(2)
-------------                                          ---------------------- ----------------- ---------------------
                                                                                                                     
Equity compensation plans approved by stockholders....       7,766,678             $11.18             1,755,138      
Equity compensation plans not approved by stockholders              --                 --                    --      
       Total..........................................       7,766,678             $11.18             1,755,138      

--------                                                                        
(1) Does not include any shares of BioMarin common stock issuable under its     
 1998 Employee Stock Purchase Plan. BioMarin issues shares under this plan
once every six months based on employee elections in the preceding six  
months. Pursuant to the terms of this plan, the number of shares to be  
 issued and the price per share is not determined until immediately before
the date of issuance.                                                   

(2) Includes options and shares of common stock issuable pursuant to BioMarin's 
1997 Stock Plan, as amended, 1998 Director Option Plan and 1998 Employee
Stock Purchase Plan. Pursuant to the terms of these plans, the number of
shares of common stock available for future issuance under these plans  
   increases on the first day of each fiscal year of BioMarin or, January 1 of
each year. On the first day of each fiscal year of BioMarin, the common 
  stock available for future issuance under the 1997 Stock Plan increases by
the lesser of (i) 4% of the then outstanding capital stock of BioMarin, 
   (ii) 2,000,000 shares, or (iii) a lower amount set by the BioMarin board of
directors. On the first day of each fiscal year of BioMarin, the common 
  stock available for future issuance under each of the 1998 Director Option
 Plan and the 1998 Employee Stock Purchase Plan increases by the lesser of
(i) 200,000 shares, (ii) 0.5% of the then outstanding capital stock of  
 BioMarin, or (iii) a lower amount set by the BioMarin board of directors.

Report of Audit Committee                                                       

  The Audit Committee reviews BioMarin's financial reporting process on behalf
of the board of directors. Management has the primary responsibility for the    
financial statements and the reporting process, including the system of         
internal controls.                                                              

 In this context, the Committee has met and held discussions with management
and the independent auditors. Management represented to the Committee that      
BioMarin's consolidated financial statements were prepared in accordance with   
generally accepted accounting principles, and the Committee has reviewed and    
discussed the consolidated financials statements with management and the        
independent auditors. The Committee discussed with the independent auditors     
matters required to be discussed by Statement on Auditing Standards No. 61      
(Communication With Audit Committees).                                          

 In addition, the Committee has discussed with the independent auditors, the
auditor's independence from BioMarin and its management, including the matters  
in the written disclosures required by the Independence Standards Board         
Standard No. 1 (Independent Discussions With Audit Committees).                 

123 

DEFM14A
137th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 137th
The Committee discussed with management and the independent auditors the  
overall scope and plans for the 2001 annual audit. The Committee meets with     
management and the independent auditors, with and without management present,   
to discuss the results of their examination, the evaluations of BioMarin's      
internal controls, and the overall quality of BioMarin's financial reporting.   

 In reliance on the reviews and discussions referred to above, the Committee
recommended to the board of directors, and the board has approved, that the     
audited financial statements be included in BioMarin's Annual Report on Form    
10-K for the year ended December 31, 2001, for filing with the U.S. Securities  
and Exchange Commission and the Swiss SWX New Market. The Committee recommended 
to the board of directors and the board has approved the selection of           
BioMarin's independent auditors for the year ending December 31, 2002. However, 
the Committee recommended that the Committee and the board of directors         
continue to monitor developments affecting Arthur Andersen LLP.                 

Respectfully submitted on March 25, 2002 by the members of the Audit      
Committee of the Board of Directors:                                            

Gwynn R. Williams                                                               
Erich Sager                                                                     
Phyllis I. Gardner, M.D.                                                        

Report of Compensation Committee                                                

The Compensation Committee is responsible for setting general compensation
goals and operational guidelines for BioMarin personnel, for setting all        
elements of the compensation of the executive officers of BioMarin, and for     
approving grants of stock options for BioMarin. At all meetings of the          
Compensation Committee in 2001, the Compensation Committee was composed of the  
three outside, non-management members of the board of directors.                

Compensation Goals and Policies                                             

The goal of BioMarin's compensation policies is to provide compensation   
sufficient to attract, motivate and retain executives and staff of outstanding  
ability and potential. Compensation policies are intended to establish an       
appropriate relationship between executive compensation and the creation of     
stockholder value as measured by the equity markets. BioMarin uses the          
following principles to help achieve that goal:                                 

(1) BioMarin provides competitive compensation packages incorporating all 
  compensation elements for executives and staff based upon BioMarin's
internal policies and compensation packages at similarly situated 
       pharmaceutical and biotechnology companies in the San Francisco Bay Area.

  (2) BioMarin rewards executives and senior staff for outstanding performance
by the individual and by BioMarin.                                

(3) BioMarin seeks to align the long-term interests of the stockholder and
   the executives and the senior staff through the use of employee stock
options and other stock priced related compensation, such as its  
Employee Stock Purchase Program.                                  

Considerations for 2001 Compensation                                        

  Increases in base salary for 2001 were made effective January 2001 primarily
based on the progress and achievements of BioMarin during 2000 and competitive  
conditions in the job marketplace for biotechnology expertise in the San        
Francisco Bay Area marketplace.                                                 

The Compensation Committee took particular note of 2000 achievements      
including the initiation of a Phase 3 trial of Aldurazyme and a Phase 1 trial   
of Aryplase (formerly rhASB). However, the Compensation Committee also noted    
the lack of corporate activity during the first half of 2000.                   

124 

DEFM14A
138th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 138th
Based on the Compensation Committee's judgment as to the value of these   
events and other less visible internal developments, the Compensation Committee 
awarded long-term compensation stock option grants to the executives and staff  
of BioMarin. Except for Mr. Price, who is covered under a separate employment   
agreement, the Compensation Committee also granted short-term incentive stock   
options as a reward for BioMarin's program in comparison to plan in 2000.       
Grants under both programs were pro-rated for the portion of the year that the  
employee was in the service of BioMarin.                                        

Salary compensation for the staff below the rank of officer was generally 
increased by an average of 5%, which approximated the reported average salary   
increase in the biotechnology industry in the San Francisco Bay Area and which  
was also pro-rated for time in service during the year. The Compensation        
Committee deemed that these compensation actions were appropriate for the       
progress made by BioMarin in 2000 and maintained a competitive balance with     
biotechnology companies of similar size and state of development in the region. 

 With respect to officer salary, the Compensation Committee determined that,
based on the factors described above, it was appropriate and elected to         
increase salaries by an average of 15%. Additionally, due to the size of prior  
grants of stock options to officers, the Compensation Committee determined that 
the prior option grants provided the current officers with significant          
motivation and sufficiently linked their compensation to the performance of     
BioMarin. The Compensation Committee expressed concerns about limiting the      
availability of options for non-officer employees and possible dilution of      
current stockholders. Accordingly, the Compensation Committee reduced new       
option grants to current officers by an average of one-half.                    

Chief Executive Officer Compensation                                        

  Effective October 31, 2000, Mr. Fredric D. Price was elected by the Board of
Directors to the position of Chief Executive Officer and Chairman of the Board. 
At that time, the Compensation Committee negotiated a three year employment     
agreement, which included a competitive compensation package appropriate to     
Mr. Price's demonstrated leadership capabilities and achievements. Mr. Price's  
base salary for 2001 was set by this employment agreement. Pursuant to the      
terms of his employment contract, Mr. Price was also entitled to a bonus of     
$200,000 and an additional stock option grant to purchase 100,000 shares for    
his first year of service.                                                      

The terms of Mr. Price's compensation for 2001 were primarily determined  
prior to his service with BioMarin. However, the Compensation Committee         
believes that, during 2001, Mr. Price has amply demonstrated that his skills    
merit his remuneration. In particular, the Compensation Committee notes the     
consummation of three financing facilities, which raised more than $156 million 
in gross proceeds for BioMarin, the acquisition by BioMarin of the IBEX         
pharmaceutical product programs and the advancement of two additional internal  
product programs from the lab to clinical trials. In light of these             
accomplishments, and in particular the follow on public offering of BioMarin's  
common stock the Compensation Committee awarded Mr. Price an additional bonus   
of $78,500.                                                                     

The Compensation Committee believes that the above authorized compensation
actions based upon BioMarin achievements and competitive compensation levels    
will serve to help retain a highly qualified and motivated staff led by         
excellent senior management that is a requirement for the prosperity of         
BioMarin and the creation of stockholder value.                                 

 Respectfully submitted on March 25, 2002 by the members of the Compensation
Committee of the board of directors:                                            

Erich Sager                                                                     
Phyllis I. Gardner, M.D.                                                        
Gwynn R. Williams                                                               

125 

DEFM14A
139th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 139th
Performance Graph                                                               

The following graph compares the cumulative total stockholder return with 
the cumulative total return of the Nasdaq Stock Market (U.S.) and the Nasdaq    
Pharmaceutical Index of stocks in Standard Industry Code (SIC) 283,             
encompassing primarily biotechnology, pharmaceutical and medical specialty      
companies, assuming a $100 investment in common stock on July 31, 1999 and      
reinvestment of dividends during the period. The period covered by the graph    
includes that portion of the fiscal year ended December 31, 1999 during which   
BioMarin was publicly traded.                                                   

[CHART] 

                                                                [Download Table]

                                    Nasdaq                      Nasdaq      
              BioMarin        Stock Market (U.S.)       Pharmaceutical Index
                                                                            
7/31/1999       100                  100                         100        
                119                  104                         108        
                134                  104                         103        
                118                  113                         104        
                103                  126                         117        
                 90                  154                         150        
1/31/2000       112                  149                         172        
                240                  177                         242        
                273                  173                         184        
                137                  146                         162        
                129                  128                         159        
                131                  151                         205        
                144                  142                         190        
                130                  159                         228        
                141                  139                         225        
                100                  127                         203        
                 75                   98                         180        
                 75                   93                         187        
1/31/2001        92                  104                         179        
                 65                   81                         170        
                 57                   69                         139        
                 83                   80                         156        
                 89                   80                         169        
                102                   82                         172        
                 91                   76                         159        
                 94                   68                         159        
                 75                   57                         139        
                 88                   64                         153        
                 92                   73                         167        
                103                   74                         160        
1/31/2002                                                                   

Certain Relationships and Related Transactions                                  

Since January 1, 2001, there has not been nor is there currently proposed 
any transaction or series of similar transactions to which BioMarin was or is   
to be a party in which the amount involved exceeds $60,000 and in which any     
director, executive officer, holder of more than 5% of BioMarin common stock or 
any member of the immediate family of any of the foregoing persons had or will  
have a direct or indirect material interest other than (i) compensation         
agreements and other arrangements, which are described elsewhere in this Joint  
Proxy Circular and (ii) the transaction described below.                        

Transactions with Directors, Executive Officers and 5% Stockholders         

During 2001, Glyko paid BioMarin $7,700 per month in management fees for  
accounting and related regulatory reporting services.                           

Indebtedness Of Directors And Executive Officers                            

 Other than as described below, no director or executive officer of BioMarin
or associate of any director or executive officer is, or at any time since the  
beginning of the most recently completed fiscal year has been, indebted to      
BioMarin.                                                                       

In April 2001, pursuant to the terms of the employment agreement between  
BioMarin and Fredric D. Price, its Chairman and Chief Executive Officer,        
BioMarin loaned Mr. Price $860,000 to purchase a local residential property     
evidenced by a promissory note secured by the property. The note matures on     
October 31, 2004 (subject to various conditions in the employment agreement)    
and bears interest at the Federal mid-term rate, adjusted on December 31 of     
each year. As of December 31, 2001, this equaled 3.97% per annum, compounded    
annually.                                                                       

In February 2002, BioMarin loaned $300,000 to Christopher M. Starr, Ph.D. 
This loan is evidenced by a promissory note secured by 30,000 otherwise         
unencumbered shares of BioMarin common stock held by                            

126 

DEFM14A
140th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 140th
Dr. Starr. The note matures on October 31, 2002 and bears interest at the rate  
of 2.74% per annum, the relevant Applicable Federal Rate as of February 2002.   

Pursuant to the Stock Purchase Agreements under which BioMarin sold stock 
("Founders' Shares") to two founding officers of BioMarin, BioMarin has loaned  
$1,300,000 and $400,000 to Mr. Denison and Dr. Starr, respectively, to purchase 
common stock of BioMarin. The loans are evidenced by interest bearing           
promissory notes due on demand and are fully recourse.                          

The following table sets forth any indebtedness of directors or executive 
officers of BioMarin entered into in connection with the purchase of the        
Founders' shares.                                                               

                                                        [Enlarge/Download Table]

                                                                  Outstanding            Security for
                                                      Largest     Indebtedness Number of Indebtedness
                                                     Amount of       as of      Common    Number of  
                                                    Outstanding   December 31,  Shares    Shares of  
           Name of Borrower               Lender  Indebtedness(1)   2001(1)    Purchased Common Stock
           ----------------              -------- --------------- ------------ --------- ------------
                                                                                                     
Grant W. Denison, Jr.(2)................ BioMarin   $1,631,660     $1,631,660  1,300,000  1,300,000  
Christopher M. Starr, Ph.D.............. BioMarin   $  430,452     $  430,452    400,000    342,956  

--------                                                                        
(1) Includes accrued interest at 6% per annum.                                  
(2) Mr. Denison resigned from the BioMarin board of directors as of May 29,     
2002.                                                                   

Legal Proceedings                                                               

BioMarin has no material legal proceedings pending.                       

Auditors, Registrar and Transfer Agent                                          

The auditors of BioMarin are KPMG LLP, independent certified public       
accountants. The transfer agent and registrar for BioMarin's common stock is    
Mellon Investor Services LLC, 95 Challenger Road, Ridgefield Park, New Jersey   
07660.                                                                          

127 

DEFM14A
141st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 141st
BIOMARIN MANAGEMENT'S DISCUSSION AND ANALYSIS 
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  

Overview                                                                        

BioMarin develops enzyme therapies to treat serious, life-threatening     
diseases and conditions. BioMarin leverages its expertise in enzyme biology to  
develop product candidates for the treatment of genetic diseases, including MPS 
I, MPS VI and PKU, as well as other critical care situations such as            
cardiovascular surgery and serious burns. BioMarin's product candidates address 
markets for which no products are currently available or where current products 
have been associated with major deficiencies. BioMarin focuses on conditions    
with well-defined patient populations, including genetic diseases, which        
require chronic therapy.                                                        

 BioMarin's lead product candidate, Aldurazyme,(TM) which recently completed
a Phase 3 trial, is being developed for the treatment of Mucopolysaccharidosis  
I (MPS I) disease.                                                              

BioMarin is developing its second product candidate, Neutralase(TM), for  
reversal of anticoagulation by heparin in patients undergoing Coronary Artery   
Bypass Graft, or CABG, surgery and angioplasty. BioMarin acquired rights to     
Neutralase through its acquisition of the pharmaceutical assets of IBEX         
Technologies Inc. in the fourth quarter of 2001. Heparin is a carbohydrate drug 
commonly used to prevent coagulation, or blood clotting, during certain types   
of major surgery. Neutralase is a carbohydrate-modifying enzyme that cleaves    
heparin, allowing coagulation of blood and aiding patient recovery following    
CABG surgery and angioplasty. Based on data from previous trials, BioMarin      
plans to initiate a Phase 3 trial in CABG surgery in the third quarter of 2002. 

In addition to Aldurazyme and Neutralase, BioMarin is developing other    
enzyme-based therapeutics for the treatment of a variety of diseases and        
conditions. In 2001, BioMarin announced the results of a Phase 1 trial of       
Aryplase(TM) for the treatment of MPS VI, another seriously debilitating        
genetic disease. Based on data from the Phase 1 trial, BioMarin initiated a     
Phase 2 trial of Aryplase in the first quarter of 2002. BioMarin is also        
developing Vibrilase/TM/, a topical enzyme product for use in removing burned   
skin tissue in preparation for skin grafting or other therapy. BioMarin         
initiated a Phase 1 clinical trial of Vibrilase in the United Kingdom in the    
fourth quarter of 2001, and expects to analyze the results from this trial in   
the fourth quarter of 2002. In addition, BioMarin is pursuing preclinical       
development of other enzyme product candidates for genetic and other diseases.  

Results of Operations                                                           

In December 2001, BioMarin decided to close the carbohydrate analytical   
business portion of its wholly-owned subsidiary, Glyko, Inc., which provided    
all of Glyko, Inc.'s revenues. The decision to close Glyko, Inc. has resulted   
in the operations of Glyko Inc. being classified as discontinued operations in  
BioMarin's consolidated financial statements and, accordingly, BioMarin has     
segregated the assets and liabilities of the discontinued operations in its     
consolidated balance sheets. In addition, BioMarin has segregated the operating 
results in its consolidated statements of operations and has segregated cash    
flows from discontinued operations in its consolidated statements of cash flows.

The Quarters Ended March 31, 2002 and 2001                                  

For the quarters ended March 31, 2002 and 2001, BioMarin's revenues were  
$3.8 million and $2.7 million, respectively, which came exclusively from its    
joint venture with Genzyme. The increase in joint venture revenues in the first 
quarter of 2002 compared to the same period in 2001 was caused by increased     
manufacturing activities in support of BioMarin's Phase 1 and Phase 3 extension 
studies of $1.1 million, increased regulatory, clinical and plant and process   
validation efforts in preparation for the rolling BLA submission that commenced 
in April 2002 of $0.1 million offset by a reduction in process development      
activities of $0.1 million.                                                     

128 

DEFM14A
142nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 142nd
Research and development expenses increased to $13.2 million in the first 
quarter of 2002 from $9.7 million in the comparable period of 2001. The major   
factors in the growth of research and development expenses include $2.2 million 
of increased expenses for the Aldurazyme joint venture with Genzyme, especially 
manufacturing, regulatory and clinical requirements, $0.9 million for           
manufacturing and clinical requirements to support BioMarin's Phase 2 clinical  
trial and Phase 1 extension study of Aryplase and $0.4 million for the          
increased manufacturing and research staff to support its product programs,     
including the addition of scientific staff in Montreal, Canada in October 2001  
supporting Neutralase and Phenylase and in Vancouver, Canada in March 2002      
supporting the technology purchased from Synapse. BioMarin anticipates research 
and development expenditures to continue to increase in the future in order to  
further develop its drug product candidates.                                    

General and administrative expenses increased to $3.9 million in the first
quarter of 2002 from $1.5 million in the comparable period of 2001. This        
increase was primarily due to costs incurred in the first quarter of 2002 for   
legal and other fees associated with the Synapse acquisition of $1.0 million    
and the potential acquisition of all of the outstanding capital stock of Glyko  
by BioMarin of $0.8 million (in exchange for BioMarin's common stock),          
increased staffing in finance, business development, information systems and    
purchasing of $0.2 million and expenses related to the implementation of an     
improved financial reporting and budgeting software system of $0.2 million.     
Over the next year, BioMarin anticipates that general and administrative        
expenditures will increase approximately 30%, exclusive of the extraordinary    
costs associated with the acquisitions and the implementation of the financial  
reporting system. This increase will primarily be due to increased headcount    
and facilities to support the growth of BioMarin.                               

In-process research and development totaling $11.2 million represents the 
majority of the purchase price of BioMarin's acquisition of all of the          
outstanding stock of Synapse Technologies Inc. in March 2002 plus related       
expenses. On March 21, 2002, BioMarin purchased Synapse including its           
development activities and preclinical data on NeuroTrans, a technology that    
may allow drugs to cross the blood brain barrier, for $10.2 million in BioMarin 
common stock at a deemed price of $11.50 per share (885,240 shares). In         
connection with the Synapse purchase, BioMarin issued options and warrants to   
purchase 80,221 and 27,419 shares of its common stock, respectively. These      
options and warrants were valued using the Black-Scholes option pricing model   
and the resulting valuations of $561,000 and $85,000, respectively, were        
included as additional purchase price. The purchase agreement includes up to    
Cdn. $8 million (which equaled approximately U.S. $5 million as of May 1, 2002) 
in contingency payments upon certain regulatory and licensing milestones if     
they occur before March 21, 2012.                                               

Interest income decreased by $88,000 to $380,000 in the first quarter of  
2002 from $468,000 in the first quarter of 2001 primarily due to the decrease   
in interest rates available on short-term investments, offset in part by higher 
cash balances resulting from BioMarin's recent financing activities.            

  Interest expense for the first quarter of 2002 was $91,000 and $2,000 in the
comparable period of 2001. The increase was due to equipment loans executed for 
$5.5 million in December 2001.                                                  

BioMarin's equity in the loss of its joint venture with Genzyme was $2.3  
million for the first quarter of 2002 compared to $1.1 million for the first    
quarter of 2001, as the joint venture continued extension studies of the        
original Phase 1 clinical trial and the Phase 3 clinical trial of Aldurazyme    
and filed an MAA in Europe.                                                     

Net loss from continuing operations was $26.6 million ($0.51 per share,   
basic and diluted) and $9.1 million ($0.24 per share, basic and diluted) for    
the first quarter of 2002 and 2001, respectively.                               

Income (loss) from discontinued operations relating to the Glyko, Inc.    
analytics business was $122,000 in the first quarter of 2002 and $(617,000) in  
the comparable period of 2001. The increase to income in 2002 was due to an     
increase in sales to customers in anticipation of a possible sale or            
discontinuance of the analytics business of Glyko, Inc.                         

129 

DEFM14A
143rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 143rd
Loss from disposal of discontinued operations represents the Glyko, Inc.  
closure expense of $141,000 in the first quarter of 2002 consisting primarily   
of accrued severance to personnel who did not become BioMarin's employees and   
marketing and investment banking fees incurred in connection with the potential 
sale of the analytics business of Glyko, Inc.                                   

Net loss was $26.6 million ($0.51 per share, basic and diluted) and $9.7  
million ($0.26 per share, basic and diluted) for the first quarters of 2002 and 
2001, respectively.                                                             

Years Ended December 31, 2001 and 2000                                      

 For the years ended December 31, 2001 and 2000, revenues were $11.7 million
and $9.7 million, respectively. Revenues from BioMarin's joint venture with     
Genzyme were $11.3 million and $9.7 million, and other revenues were $0.4       
million and zero representing grant revenues for the years ended December 31,   
2001 and 2000, respectively. The increase in joint venture revenues in 2001 was 
primarily the result of increased manufacturing activities in support of        
BioMarin's Phase 3 clinical trial and its Phase 1 and Phase 3 extension         
studies, increased regulatory, clinical and plant and process validation        
efforts in preparation for a BLA that will be filed as soon as possible.        

Research and development expenses increased to $45.3 million in 2001 from 
$34.5 million in 2000. The major factors in the growth of research and          
development expenses include increased expenses in support of the Aldurazyme    
joint venture with Genzyme, especially manufacturing, regulatory and clinical   
requirements, manufacturing and clinical requirements to support BioMarin's     
Phase 1 clinical trial of Aryplase, of the contract manufacturing requirements  
to support BioMarin's Phase 1 clinical trial of Vibrilase and the increased     
manufacturing and research staff, including the scientific staff BioMarin       
assumed in Montreal, Canada in its purchase of the therapeutic assets of IBEX   
Technologies, Inc. and its subsidiaries in October 2001, to support BioMarin's  
product programs. BioMarin anticipates research and development expenditures to 
increase in the future relating to the increased headcount and facilities to    
support its growth.                                                             

General and administrative expenses increased to $6.7 million in 2001 from
$6.5 million in 2000. This increase was primarily due to the costs incurred in  
2001 in legal and other fees associated with the potential purchase of all of   
the outstanding capital stock of Glyko Biomedical Ltd. by BioMarin (in exchange 
for BioMarin common stock) anticipated to close in the second quarter of 2002,  
increased staffing in finance, business development, information systems and    
purchasing, partially offset savings due to the elimination of the President    
position from BioMarin's executive team. BioMarin anticipates general and       
administrative expenditures to increase in the future relating to the increased 
headcount and facilities to support its growth.                                 

 In-process research and development represents all of the purchase price of
BioMarin's acquisition of the IBEX therapeutic assets in October 2001 plus      
related expenses totaling $11.7 million. On October 31, 2001, BioMarin          
purchased from IBEX Technologies Inc. and its subsidiaries the development      
activities associated with the IBEX therapeutic enzyme drug products (including 
Neutralase and Phenylase). The purchase agreement called for a total purchase   
price of $10.4 million, consisting of $2 million in cash and $8.4 million of    
common stock. In accordance with the purchase agreement, the number of common   
shares was based on the average share price from September 5, 2001 to October   
8, 2001, which resulted in the issuance of 814,467 shares. In connection with   
the transaction, BioMarin issued options to purchase 43,861 shares of its       
common stock. These options were valued using the Black-Scholes option pricing  
model and the resulting valuation of $291,000 was included as additional        
purchase price. The purchase agreement includes up to approximately $9.5        
million in contingency payments upon regulatory approval of Neutralase and      
Phenylase, provided that approval occurs prior to October 31, 2006.             

Facility closure in 2000, represents a charge of $4.4 million for the     
closure of its Carson Street clinical manufacturing facility. The charge        
primarily consisted of impairment reserves for leasehold improvements and       
equipment located in the Carson Street facility.                                

130 

DEFM14A
144th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 144th
 Interest income decreased by $1.1 million to $1.9 million in 2001 from $3.0
million in 2000 primarily due to the decrease in cash available for investment  
through most of the 2001 (as BioMarin's significant follow-on offering occurred 
in December 2001) and the decrease in interest rates available on short-term    
investments.                                                                    

Interest expense for 2001 and 2000 were immaterial. BioMarin expects      
interest expense to increase in future years due to equipment loans, executed   
for a total of $5.5 million in December 2001.                                   

BioMarin's equity in the loss of its joint venture with Genzyme was $7.3  
million for 2001 compared to $2.9 million for 2000, as the joint venture        
conducted a multi-site, placebo-controlled Phase 3 clinical trial of            
45 patients which commenced in December 2000 and continued extension studies of 
the original Phase 1 clinical trial and the Phase 3 clinical trial of           
Aldurazyme.                                                                     

Net loss from continuing operations was $57.4 million ($1.40 per share,   
basic and diluted) and $35.6 million ($0.99 per share, basic and diluted) for   
2001 and 2000, respectively.                                                    

Loss from discontinued operations relating to the Glyko, Inc. analytics   
business increased by $0.6 million to $2.3 million in 2001 compared to $1.7     
million in 2000 due to the increased sales and production staff in 2001 in an   
attempt to grow the core analytics business.                                    

Loss from disposal of discontinued operations represents the Glyko, Inc.  
closure expense of $7.9 million in 2001 consisting primarily of an impairment   
reserve against the unamortized balance of goodwill and other intangible assets 
related to the initial acquisition of Glyko, Inc. The majority of the Glyko,    
Inc. employees will be incorporated into the BioMarin business and such         
employees will continue to provide necessary analytic and diagnostic support to 
BioMarin's therapeutic products.                                                

Net loss was $67.6 million ($1.65 per share, basic and diluted) and $37.4 
million ($1.04 per share, basic and diluted) for 2001 and 2000, respectively.   

Years Ended December 31, 2000 and 1999                                      

For the years ended December 31, 2000 and 1999, revenues were $9.7 million
and $5.3 million, respectively representing revenues from BioMarin's joint      
venture with Genzyme. The increase in joint venture revenues in 2000 was        
primarily the result of increased manufacturing activities as BioMarin began    
enzyme production in its new Galli Drive manufacturing facility in Novato,      
California.                                                                     

Research and development expenses increased to $34.5 million in 2000 from 
$26.3 million in 1999. Increased expenses in support of the Aldurazyme joint    
venture with Genzyme, especially manufacturing requirements, and of the         
Aryplase program were the major factors in the growth of research and           
development expenses.                                                           

General and administrative expenses increased to $6.5 million in 2000 from
$4.8 million in 1999. This increase was partially due to the increase in        
staffing and facilities in 2000.                                                

  In the first quarter of 2000, BioMarin recorded a charge of $4.4 million for
the closure of its Carson Street clinical manufacturing facility. The facility  
was no longer required for the production of Aldurazyme, the initial purpose of 
the plant, after a decision by the BioMarin/Genzyme LLC joint venture to use    
BioMarin's Galli Drive facility for the manufacture of bulk Aldurazyme both for 
the Phase 3 trial and for the commercial launch of Aldurazyme. This decision    
was based in part on FDA guidance to use an improved production process, which  
was installed in the Galli facility, for the clinical trial, for the BLA        
submission and for the commercial production. The majority of BioMarin's        
technical staff at the Carson Street facility transferred to the Galli Drive    
facility in Novato, California in May 2000. The charge primarily consisted of   
impairment reserves for leasehold improvements and equipment located in the     
Carson Street facility.                                                         

131 

DEFM14A
145th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 145th
 Interest income increased to $3.0 million in 2000 from $1.8 million in 1999
primarily due to increased cash reserves resulting from BioMarin's initial      
public offering (concurrent with an investment by Genzyme) in July 1999 and     
funds received from exercise of stock options and warrants.                     

Interest expense decreased by $0.7 million in 2000 compared to 1999 due to
the interest accrued in 1999 from April through July on BioMarin convertible    
notes payable which, along with the accrued interest converted into BioMarin    
common stock issued to note holders concurrent with BioMarin's initial public   
offering.                                                                       

BioMarin's equity in the loss of its joint venture with Genzyme was $2.9  
million for 2000 compared to $1.7 million for 1999, as the joint venture        
continued the original clinical trial of Aldurazyme and began a Phase 3         
clinical trial.                                                                 

Net loss from continuing operations was $35.6 million ($0.99 per share,   
basic and diluted) and $26.4 million ($0.88 per share, basic and diluted) for   
2000 and 1999, respectively.                                                    

Loss from discontinued operations was $1.7 million for 2000 and 1999      
representing the Glyko, Inc. analytics business.                                

The net loss was $37.4 million ($1.04 per share, basic and diluted) and   
$28.1 million ($.94 per share, basic and diluted) for 2000 and 1999,            
respectively.                                                                   

Liquidity and Capital Resources                                                 

 BioMarin has financed its operations since its inception by the issuance of
common stock and convertible notes, equipment financing and the related         
interest income earned on cash balances available for short-term investment.    
Since inception, BioMarin has raised aggregate net proceeds of approximately    
$286 million. BioMarin was initially funded by and investment from Glyko.       
BioMarin has since raised additional capital from the sale of its common stock  
in both public and private offerings and the sale of its other securities, all  
of which have since converted into common stock.                                

As of March 31, 2002, BioMarin's combined cash, cash equivalents and      
short-term investments totaled $114.8 million, a decrease of $16.3 million from 
$131.1 million at December 31, 2001. The primary uses of cash during the        
quarter ended March 31, 2002 were to finance operations, fund the joint venture 
with Genzyme, purchase leasehold improvements and equipment and expenses        
associated with the purchase of Synapse (primarily legal fees). The primary     
sources of cash during the quarter were the issuance of common stock pursuant   
to the exercise of stock options under the 1997 Stock Plan, the aggregate       
exercise price of which totaled approximately $0.4 million.                     

BioMarin's combined cash, cash equivalents and short-term investments     
totaled $114.8 million at March 31, 2002 a decrease of $16.3 million from       
$131.1 million at December 31, 2001. The primary use of cash during the quarter 
ended March 31, 2002 was to finance operations, fund the joint venture,         
purchase leasehold improvements and equipment and expenses associated with the  
purchase of Synapse (primarily legal fees). The primary sources of cash during  
the quarter were:                                                               

.   equipment financing of $5.5 million; and                                

.   the issuance of common stock pursuant to the exercise of stock options  
    under the 1997 Stock Plan, the aggregate exercise price of which totaled
approximately $0.4 million.                                         

From its inception through March 31, 2002, BioMarin has purchased         
approximately $53.3 million of leasehold improvements and equipment. BioMarin   
expects that its investment in leasehold improvements and equipment will        
increase significantly during the next two years because it will provide        
facilities and equipment for a larger staff and increase manufacturing capacity.

132 

DEFM14A
146th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 146th
BioMarin plans to make substantial commitments to capital projects,       
including developing new research and development facilities and expanding its  
administrative and support offices.                                             

For the years ended December 31, 1999, 2000 and 2001, BioMarin's total    
research and development expenses were $26.3 million, $34.5 million and $45.3   
million, respectively. BioMarin anticipates that research and development       
expenditures will continue to increase in the future due to increased head      
count and expansion of its facilities to support growth and development of our  
drug product candidates.                                                        

As of March 31, 2002, BioMarin's total research and development expense to
date was $131.5 million which was allocated $65.0 million to Aldurazyme, $0.6   
million to Neutralase, $14.9 million to Aryplase, $6.6 million to Vibrilase and 
$44.4 million to research and development costs not allocated to specific       
projects or related to projects that have been abandoned.                       

  In the first quarter of 2002, BioMarin's research and development expense of
$13.2 million was allocated $7.7 million to Aldurazyme, $0.4 million to         
Neutralase, $2.1 million to Aryplase, $0.4 million to Vibrilase and $2.6        
million to research and development costs not allocated to specific projects.   

In the year ended December 31, 2001, BioMarin's research and development  
expense of $45.3 million was allocated $22.5 million to Aldurazyme, $0.2        
million to Neutralase, $8.0 million to Aryplase, $2.8 million to Vibrilase and  
$11.8 million to research and development costs not allocated to specific       
projects.                                                                       

In the year ended December 31, 2000, BioMarin's research and development  
expense of $34.5 million was allocated $19.5 million to Aldurazyme, $3.9        
million to Aryplase, $0.8 million to Vibrilase and $10.3 million to research    
and development costs not allocated to specific projects.                       

In the year ended December 31, 1999, BioMarin's research and development  
expense of $26.3 million was allocated $10.6 million to Aldurazyme, $0.9        
million to Aryplase, $2.6 million to Vibrilase and $12.2 million to research    
and development costs not allocated to specific projects or related to projects 
that have been abandoned.                                                       

Due to the uncertainty of the development of, and the complications of    
obtaining regulatory approval for the commercialization of, pharmaceutical      
products, it is impossible to estimate the future costs associated with the     
completion of any of BioMarin's product programs, the anticipated completion    
date, or the date by which the project will generate significant revenue from   
sales, if at all. See "Risk Factors--Risks Relating to BioMarin" and, in        
particular, the discussions captioned "If BioMarin fails to obtain regulatory   
approval to commercially manufacture or sell any of its future drug products,   
or if approval is delayed..."; "To obtain regulatory approval to market         
BioMarin's products, preclinical studies and costly and lengthy clinical trials 
will be required..."; and "If BioMarin is unable to manufacture its drug        
products in sufficient quantities and at acceptable cost..." in that section.   

  In September 1998, BioMarin established a joint venture with Genzyme for the
worldwide development and commercialization of Aldurazyme for the treatment of  
MPS I. BioMarin shares expenses and profits from the joint venture equally with 
Genzyme. Genzyme has committed to pay BioMarin an additional $12.1 million upon 
approval of the BLA for Aldurazyme.                                             

 On May 16, 2001, BioMarin sold 4,763,712 shares of BioMarin common stock at
$9.45 per share and, for no additional consideration, issued three-year         
warrants to purchase 714,554 shares of common stock at an exercise price of     
$13.10 per share and received net proceeds of approximately $41.6 million.      
Also, on May 17, 2001, a fund managed by Acqua Wellington purchased 105,821     
shares of common stock and received warrants to purchase 15,873 shares of       
common stock on the same price and terms as the May 16, 2001 transaction;       
BioMarin received net proceeds of approximately $1 million.                     

In August 2001, BioMarin signed an amended agreement with Acqua Wellington
North American Equities Fund Ltd. (Acqua Wellington) for an equity investment   
in BioMarin. The agreement allows for the purchase of                           

133 

DEFM14A
147th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 147th
up to $27.7 million. Under the terms of the agreement, BioMarin will have the   
option to request that Acqua Wellington invest in BioMarin through sales of     
registered common stock at a small discount to market price. The maximum amount 
that BioMarin may request to be bought in any one month is dependent upon the   
market price of the stock (or an amount that can be mutually agreed-upon by     
both parties) and is referred to as the "Draw Down Amount." Subject to certain  
conditions, Acqua Wellington is obligated to purchase this amount if requested  
to do so by BioMarin. In addition, BioMarin may, at its discretion, grant a     
"Call Option" to Acqua Wellington for an additional investment in an amount up  
to the "Draw Down Amount" which Acqua Wellington may or may not choose to       
exercise. During 2001, Acqua Wellington purchased 1,344,194 shares for $13.5    
million ($13.2 million net of issuance costs). Under this agreement, Acqua      
Wellington may also purchase stock and receive similar terms of any other       
equity financing by BioMarin.                                                   

On December 13, 2001, BioMarin completed a follow-on public offering of   
BioMarin common stock. In the offering, BioMarin sold 8,050,000 shares,         
including 1,050,000 shares to cover over-allotments, at a price to the public   
of $12.00 per share. The net proceeds to BioMarin were approximately $90.4      
million.                                                                        

During December 2001, BioMarin entered into three separate agreements with
General Electric Capital Corporation for secured loans totaling $5.5 million.   
The notes bear interest (ranging from 9.1% to 9.31%) and are secured by certain 
manufacturing and laboratory equipment. Additionally, one of the agreements is  
subject to a covenant that requires BioMarin to maintain a minimum unrestricted 
cash balance of $25 million. Should the unrestricted cash balance fall below    
$25 million, the note is subject to prepayment, including prepayment penalties  
ranging from 1% to 4%.                                                          

The net proceeds from any sales of BioMarin common stock or equipment     
financing will be used to fund operating costs, capital expenditures and        
working capital requirements, which may include costs associated with           
BioMarin's lead clinical programs including Aldurazyme for MPS I, Neutralase    
for heparin reversal, Aryplase for MPS VI and Vibrilase for burn wounds. In     
addition, net proceeds may also be used for research and development of other   
pipeline products, building of BioMarin's supporting infrastructure, and other  
general corporate purposes.                                                     

BioMarin expects its current funds to last through 2003. BioMarin does not
expect to generate positive cash flow from operations at least through 2004     
because BioMarin expects to increase operational expenses and manufacturing     
investment for the joint venture and to increase research and development       
activities, including:                                                          

.   preclinical studies and clinical trials;                                

.   process development, including quality systems for product manufacture; 

  .   regulatory processes in the United States and international jurisdictions;

.   clinical and commercial scale manufacturing capabilities; and           

.   expansion of sales and marketing activities.                            

Until BioMarin can generate sufficient levels of cash from its operations,
it expects to continue its operations through the expenditure of its current    
cash, cash equivalents and short-term investments and possibly supplement its   
cash, cash equivalents and short-term investments through:                      

.   the sale of equity securities;                                          

.   equipment-based financing; and                                          

.   collaborative agreements with corporate partners.                       

BioMarin anticipates a need for additional financing to fund the future   
operations of its business, including the commercialization of BioMarin's drug  
products currently under development. BioMarin cannot assure you that           
additional financing will be obtained or, if obtained, will be available on     
reasonable terms or in a timely manner.                                         

134 

DEFM14A
148th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 148th
BioMarin's future capital requirements will depend on many factors,       
including, but not limited to:                                                  

.   The progress, timing and scope of BioMarin's preclinical studies and    
clinical trials                                                     

.   The time and cost necessary to obtain regulatory approvals              

.   The time and cost necessary to develop commercial manufacturing         
processes, including quality systems and to build or acquire        
manufacturing capabilities                                          

.   The time and cost necessary to respond to technological and market      
developments                                                        

.   Any changes made or new developments in BioMarin's existing             
  collaborative, licensing and other commercial relationships or any new
     collaborative, licensing and other commercial relationships that BioMarin
may establish                                                       

BioMarin plans to continue its policy of investing available funds in     
government securities and investment grade, interest-bearing securities.        
BioMarin does not invest in derivative financial instruments, as defined by     
Statement of Financial Accounting Standards No. 119.                            

New Accounting Pronouncements                                                   

SFAS No. 141                                                                

On June 29, 2001, the Financial Accounting Standards Board (FASB) issued  
Statement of Financial Accounting Standards (SFAS) No. 141, Business            
Combinations, and SFAS No. 142, Goodwill and Intangible Assets. Major           
provisions of these Statements are as follows: all business combinations        
initiated after June 30, 2001 must use the purchase method of accounting;       
intangible assets acquired in a business combination must be recorded           
separately; all acquired goodwill must be assigned to reporting units for       
purposes of impairment testing and segment reporting; effective January 1,      
2002, goodwill and intangible assets with indefinite lives will not be          
amortized but will be tested for impairment annually using a fair value         
approach; other intangible assets will continue to be valued and amortized over 
their estimated lives; in-process research and development acquired in business 
combinations will continue to be written off immediately. BioMarin does not     
expect this standard to have a material impact on its consolidated financial    
position or results of operations.                                              

SFAS No. 143                                                                

  In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." BioMarin does not expect this standard to have a material impact  
on its consolidated financial position or results of operations.                

SFAS No. 144                                                                

  In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 broadens the presentation of    
discontinued operations to include more transactions and eliminates the need to 
accrue for future operating losses. Additionally, SFAS No. 144 prohibits the    
retroactive classification of assets as held for sale and requires revisions to 
the depreciable lives of long-lived assets to be abandoned. SFAS No. 144 will   
be effective January 1, 2002 for BioMarin. BioMarin does not expect this        
standard to have a material impact on its consolidated financial position or    
results of operations.                                                          

Critical Accounting Policies                                                    

Investment in BioMarin/Genzyme LLC and Related Revenue                      

  Under the terms of BioMarin's joint venture agreement with Genzyme, BioMarin
and Genzyme have each agreed to provide 50 percent of the funding for the joint 
venture. All research and development, sales and                                

135 

DEFM14A
149th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 149th
marketing, and other activities performed by Genzyme and BioMarin on behalf of  
the joint venture are billed to the joint venture at cost. Any profits or       
losses of the joint venture are shared equally by the two parties. BioMarin     
provided $43.9 million in funding to the joint venture from inception through   
March 31, 2002.                                                                 

  During the years ended December 31, 1999, 2000, 2001 and for the period from
March 21, 1997 (inception) through December 31, 2001, BioMarin incurred         
expenses and billed $10.6 million, $19.4 million, $22.6 million and $54.4       
million, respectively, for services provided to the joint venture under         
BioMarin's Agreement. Of these amounts, $5.3 million, $9.7 million, $11.3       
million and $27.2 million, respectively, or 50 percent, was recognized as       
revenue in accordance with BioMarin's policy of recognizing revenue to the      
extent that research and development costs billed to the joint venture have     
been funded by Genzyme. At December 31, 2000, and 2001, BioMarin had            
receivables of $1.8 million and $3.1 million, respectively, related to these    
billings.                                                                       

BioMarin accounts for its investment in the joint venture using the equity
method. Accordingly, BioMarin records a reduction in its investment in the      
joint venture for its 50 percent share of the loss of the joint venture. The    
percentage of the costs incurred by BioMarin and billed to the joint venture    
that are funded by BioMarin (50 percent), is recorded as a credit to BioMarin's 
equity in the loss of the joint venture.                                        

Discontinued Operations                                                     

The decision to close Glyko, Inc. has resulted in the operations of Glyko 
Inc. being classified as discontinued operations in BioMarin's consolidated     
financial statements and, accordingly, BioMarin has segregated the assets and   
liabilities of the discontinued operations in its consolidated balance sheets   
as of December 31, 2000 and 2001. In addition, BioMarin has segregated the      
operating results in its consolidated statements of operations and has          
segregated cash flows from discontinued operations in its consolidated          
statements of cash flows for all periods presented. The notes to BioMarin's     
consolidated financial statements reflect the classification of Glyko Inc.      
operations as discontinued operations.                                          

The loss on disposal of discontinued operations included in BioMarin's    
consolidated statement of operations reflects certain adjustments required at   
December 31, 2001 primarily to record an impairment reserve against the         
unamortized goodwill related to Glyko, Inc. of approximately $7.8 million.      

Goodwill and Other Intangible Assets                                        

  In connection with the acquisition of Glyko, Inc. in 1998, BioMarin recorded
intangible assets of $11.7 million. Additional intangible assets of $891,000    
were recorded in connection with the acquisition by Glyko, Inc. of the key      
assets of the bio-chemical research reagent division of Oxford GlycoSciences    
Plc. (OGS), a company not related to Glyko, Inc. During 2000, BioMarin revised  
its estimate of the useful life of these intangible assets downward to 7 years; 
the effect of this change increased amortization expense in 2000. BioMarin      
recorded an impairment reserve against the unamortized balance of $7.8 million  
at December 31, 2001 as a result of its decision to close the business.         

Impairment of Long-Lived Assets                                             

BioMarin regularly reviews long-lived assets and identifiable intangibles 
whenever events or circumstances indicate that the carrying amount of such      
assets may not be fully recoverable. BioMarin evaluates the recoverability of   
long-lived assets by measuring the carrying amount of the assets against the    
estimated undiscounted future cash flows associated with them. At the time such 
evaluations indicate that the future undiscounted cash flows of certain         
long-lived assets are not sufficient to recover the carrying value of such      
assets, the assets are adjusted to their fair values.                           

136 

DEFM14A
150th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 150th
Income Taxes                                                                

 BioMarin records a valuation allowance to reduce its deferred tax assets to
the amount that is more likely than not to be realized. For all periods         
presented, BioMarin has recorded a full valuation allowance against its net     
deferred tax asset. While BioMarin has considered future taxable income and     
ongoing prudent and feasible tax planning strategies in assessing the need for  
the valuation allowance, in the event it were to determine that it would be     
able to realize its deferred tax assets in the future in excess of its net      
recorded amount, an adjustment to the deferred tax asset would increase income  
in the period such determination was made.                                      

Quantitative and Qualitative Disclosure about Market Risk                       

BioMarin's exposure to market risk for changes in interest rates relates  
primarily to its investment portfolio. By policy, BioMarin places its           
investments with highly rated credit issuers and limits the amount of credit    
exposure to any one issuer. As stated in BioMarin's policy, BioMarin seeks to   
improve the safety and likelihood of preservation of its invested funds by      
limiting default risk and market risk. BioMarin has no investments denominated  
in foreign country currencies and therefore is not subject to foreign exchange  
risk.                                                                           

BioMarin mitigates default risk by investing in high credit quality       
securities and by positioning its portfolio to respond appropriately to a       
significant reduction in a credit rating of any investment issuer or guarantor. 
The portfolio includes only marketable securities with active secondary or      
resale markets to ensure portfolio liquidity.                                   

Based on BioMarin's investment portfolio and interest rates at March 31,  
2002, BioMarin believes that a 100 basis point change in interest rates would   
result in a decrease or increase of approximately $1.1 million, respectively,   
in the fair value of the investment portfolio. Changes in interest rates may    
affect the fair value of the investment portfolio; however, BioMarin will not   
recognize such gains or losses unless the investments are sold. Moreover, such  
gains or losses in income have historically been immaterial, because BioMarin   
has generally held the majority of such investments to maturity, a practice     
BioMarin currently intends to continue.                                         

The table below presents the carrying value for BioMarin's investment     
portfolio. The carrying value approximates fair value at December 31, 2001 and  
March 31, 2002 (unaudited).                                                     

Investment portfolio:                                                     

                                                                [Download Table]

                                         Dec. 31, 2001 March 31, 2002
                                         ------------- --------------
                                                Carrying value       
                                         --------------------------  
                                                (in thousands)       
                                                                     
Cash and cash equivalents...............   $ 12,528       $ 18,202   
Short-term investments..................    118,569*        96,596** 
                                           --------       --------   
   Total................................   $131,097       $114,798   
                                           ========       ========   

--------                                                                        
*  19% invested in A1/P1 rated commercial paper and 81% in United States agency 
securities.                                                               
** 33% invested in a bond mutual fund, 4% in corporate bonds, 47% in callable   
and non-callable Federal agencies and 16% in money market funds.          

137 

DEFM14A
151st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 151st
BUSINESS OF GLYKO 

Overview                                                                        

 Glyko filed its certificate and articles of incorporation under the laws of
Canada on June 26, 1992. Glyko's registered office is Box 25, Commerce Court    
West, 199 Bay Street, Toronto, Ontario, Canada M5L 1A9. Glyko's principal       
executive office is 371 Bel Marin Keys Blvd., Suite 210, Novato, CA 94949. On   
December 21, 1992, simultaneously with the initial public offering of its       
common shares and listing on the Toronto Stock Exchange, Glyko acquired 100% of 
the outstanding shares of Glyko, Inc., a company incorporated under the laws of 
Delaware. At the time of acquisition, Glyko, Inc. was involved with original    
scientific research aimed at developing novel analytic research instrumentation 
for carbohydrate research and for human medical diagnosis. Glyko was            
incorporated for the sole purpose of acquiring Glyko, Inc.                      

On October 25, 1996, Glyko formed BioMarin to develop its pharmaceutical  
products. On October 7, 1998, Glyko sold Glyko, Inc. to BioMarin. Glyko, Inc.   
continues to be a wholly-owned subsidiary of BioMarin producing certain         
carbohydrate analytical products. As a result of its sale of Glyko, Inc., Glyko 
has no operating activities or operational employees. Glyko's only significant  
asset, other than cash, and cash equivalents, is its investment in BioMarin. As 
of March 31, 2002, Glyko's ownership percentage of BioMarin is approximately    
21.3% based on the number of issued and outstanding shares of BioMarin common   
stock as of such date.                                                          

Since its inception, Glyko has recorded retained earnings of approximately
$16.2 million and, in the event the arrangement does not proceed, expects to    
incur losses due to its share of BioMarin's net loss resulting from the ongoing 
research and development of BioMarin's pharmaceutical product candidates.       

  Since October 8, 1998, Glyko has agreed to pay BioMarin a monthly management
fee of $7,700 for its services to Glyko primarily relating to management,       
accounting, finance and government reporting.                                   

Security Ownership of Certain Beneficial Owners and Management                  

 The following table sets forth, to Glyko's knowledge, information regarding
holdings of Glyko's common shares as of July 4, 2002, by:                       

.   persons beneficially owning, directly or indirectly, or exercising      
control or direction over, more than 5% of Glyko's common shares;   

.   directors and officers individually; and                                

.   directors and officers as a group.                                      

                                                                [Download Table]

                                Number of Glyko Percentage of Glyko
Name & Address of Shareholder    Common Shares     Common Shares   
-----------------------------   --------------- -------------------
                                                                   
EquityfourLife (Bahamas) Ltd...    3,000,000            8.7%       
 P.O. Box N-7168                                                   
 Ambassador House, Bank Lane                                       
 Nassau, Bahamas                                                   

A&A Actienbank.................    2,863,000(1)         8.3%       
 Baarerstrasse 57                                                  
 P.O. Box 4639                                                     
 6304 Zug, Switzerland                                             

Gwynn R. Williams..............    2,848,488            8.3%       
 c/o Life Science Research Ltd.                                    
 3rd Floor Salisbury House                                         
 15 Victoria Street                                                
 Douglas, Isle of Man                                              
 British Isles, UK                                                 

138 

DEFM14A
152nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 152nd
                                                                [Download Table]

                                      Number of Glyko Percentage of Glyko
Name & Address of Shareholder          Common Shares     Common Shares   
-----------------------------         --------------- -------------------
                                                                         

Joerg Gruber.........................     148,441(2)           *         
 c/o Clubb Capital Ltd.                                                  
 112/113 The Chambers                                                    
 Chelsea Harbour                                                         
 London, SW10 0XF                                                        
 England                                                                 

Johannes M. Glaus....................     102,451(3)           *         
 c/o Wyler Lustenberger Glaus                                            
 Sempacherstrasse 15                                                     
 CH-8032                                                                 
 Zurich, Switzerland                                                     

Erich Sager..........................      20,000(4)           *         
 c/o A&A Actienbank                                                      
 Baarerstrasse 57                                                        
 P.O. Box 4639                                                           
 6304 Zug, Switzerland                                                   

Urs Specker..........................      20,000(4)           *         
 c/o Ansbacher (Switzerland), Limited                                    
 PO Box 2071, Muhlebachstasse 54                                         
 CH-8032                                                                 
 Zurich, Switzerland                                                     

John A. Kolada.......................      10,000(4)           *         
 c/o Blake, Cassels & Graydon LLP                                        
 Box 25, Commerce Court West                                             
 199 Bay Street                                                          
 Toronto, Ontario                                                        
 Canada M5L 1A9                                                          

Jeffrey C. Trossman..................      10,000(4)           *         
 c/o Blake, Cassels & Graydon LLP                                        
 Box 25, Commerce Court West                                             
 199 Bay Street                                                          
 Toronto, Ontario                                                        
 Canada M5L 1A9                                                          

David G.P. Allan.....................       3,897(5)           *         
 c/o YM BioSciences Inc.                                                 
 5045 Orbitor Drive                                                      
 Building 11, Suite 400                                                  
 Mississauga, Ontario                                                    
 Canada L4W 4Y4                                                          

All Officers and Directors...........     314,789(6)           *         

--------                                                                        
*  Less than 1%.                                                              

(1) Includes 300,500 common shares held beneficially by A&A Actienbank. The     
remainder of common shares are held in discretionary accounts for the   
benefit of clients of A&A Actienbank.                                   

(2) Includes 100,441 common shares held by Clubb Capital Ltd., and 38,000       
   common shares held by Clubb BioCapital Ltd., both of which Mr. Gruber is an
affiliate. Mr. Gruber disclaims beneficial ownership of the             

139 

DEFM14A
153rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 153rd
  shares held by the companies except to the extent of his pecuniary interest.
Includes 10,000 common shares issuable upon exercise of options within 60 
days of July 4, 2002. In the event that the transaction with BioMarin is  
 completed, an additional 2,500 common shares will be issuable upon exercise
of options that will immediately become exercisable.                      

(3) Includes 10,000 common shares issuable upon exercise of options within 60   
days of July 4, 2002. In the event that the transaction with BioMarin is
   completed, an additional 2,500 common shares will be issuable upon exercise
of options that will immediately become exercisable.                    

(4) Includes 10,000 common shares issuable upon exercise of options within 60   
days of July 4, 2002. In the event that the transaction with BioMarin is
   completed, an additional 2,500 common shares will be issuable upon exercise
of options that will immediately become exercisable.                    

(5) Includes 3,897 common shares issuable upon exercise of options within 60    
days of July 4, 2002. In the event that the transaction with BioMarin is
   completed, an additional 2,500 common shares will be issuable upon exercise
of options that will immediately become exercisable.                    

(6) Includes 63,897 common shares issuable upon exercise of options within 60   
days of July 4, 2002. In the event that the transaction with BioMarin is
completed, an additional 17,500 common shares will be issuable upon     
exercise of options that will immediately become exercisable.           

Management of Glyko                                                             

  The following table sets forth information with respect to the directors and
executive officers of Glyko.                                                    

                                                                [Download Table]

                                                                     Year Joined
     Name                  Age               Position                  Company  
     ----                  ---               --------                -----------
                                                                                
Joerg Gruber.............. 41  Chairman and Director                    2000    
John A. Kolada(1)......... 37  Secretary and Director                   2000    
Jeffrey C. Trossman(1).... 41  Director                                 2000    
Johannes M. Glaus(1)...... 48  Director                                 2000    
Urs Specker............... 48  Director                                 2000    
David G. P. Allan......... 60  Director                                 2001    
Erich Sager............... 43  President and Chief Executive Officer    2000    

--------                                                                        
(1) Member of the Audit Committee.                                              

All directors hold office until the next annual meeting of shareholders or
until their successors are elected and qualified. Officers are appointed by the 
board of directors and serve at the discretion of the board. There are no       
family relationships among Glyko's officers and directors.                      

Joerg Gruber has served as Glyko's Chairman and one of Glyko's directors  
since June 2000 and is Chairman of Clubb Capital Limited and Clubb BioCapital   
Limited, London, England. He was co-founder of Clubb Capital in 1995 and        
founded Clubb BioCapital in 1999 which specializes in financing biotechnology   
and pharmaceutical companies. Clubb Capital has acted as agent to Glyko and to  
BioMarin in raising substantial amounts of equity capital on a private          
placement basis. Before joining Clubb Capital, Mr. Gruber was an independent    
venture consultant for five years. Prior to that, he had responsibility for     
fixed income sales, first with Goldman Sachs and later with Shearson Lehman.    
Mr. Gruber started his career with Union Bank of Switzerland where, over a      
nine-year period, he moved from its management-training program to              
responsibility for Swiss equity sales to a number of European countries.        

 John A. Kolada has served as Glyko's Secretary and one of Glyko's directors
since June 2000. Mr. Kolada has been a partner in Blake, Cassels & Graydon LLP  
since 1996 and a solicitor with that firm since 1992,                           

140 

DEFM14A
154th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 154th
specializing in corporate finance, mergers and acquisitions and other corporate 
and commercial matters with extensive experience in advising biotechnology and  
pharmaceutical industry participants. He was based in the U.K. office of Blake, 
Cassels & Graydon LLP in London from 1996 to July 2000, at which time he        
returned to the firm's Toronto office.                                          

 Jeffrey C. Trossman has served as one of Glyko's directors since June 2000.
Mr. Trossman has been a partner in Blake, Cassels & Graydon LLP since 1997 and  
a solicitor with that firm since 1991. Mr. Trossman's practice focuses on all   
aspects of income tax planning, including corporate re-organizations, corporate 
financing transactions, international taxation and the taxation of mutual funds 
and other investment vehicles. He has acted as counsel for a wide variety of    
public and private companies and is based in the firm's head office in Toronto. 

  Johannes M. Glaus has served as one of Glyko's directors since June 2000 and
has been a partner in the Zurich law firm Wyler Lustenberger Glaus since 1999.  
Mr. Glaus was a partner in the Zurich law firm Rinderknecht Glaus & Stadelhofer 
from 1988 to 1998 and prior to that time he was a solicitor with the Zurich law 
firm Pestalozzi Gmuer & Patry and the U.S. law firm O'Melveny & Myers, based in 
New York. Mr. Glaus has been admitted to the Bars of Zurich and New York. He    
also serves on the boards of a number of companies based in Switzerland and     
elsewhere including SMS Securities, a licensed Swiss securities dealer.         

David G.P. Allan has been Chief Executive Officer of YM BioSciences Inc.  
since April, 1998. Prior to April, 1998, Mr. Allan was Executive Director,      
Yorkton Securities Inc. In 1992 he founded the Knowledge-Based Industries Group 
of a Canadian investment banking firm, organized as the first entity in Canada  
involved in financing, analyzing and creating strategic alliances for life      
sciences and information technology companies. He has been in the investment    
banking industry in Canada since 1961. He has been a governor of The Toronto    
Stock Exchange, a member of the Toronto Society of Financial Analysts and the   
Canadian Healthcare Licensing Association.                                      

Urs Specker has served as one of Glyko's directors since June 2000 and has
served as Chief Executive Officer of Ansbacher (Switzerland) Limited since      
1991. Ansbacher (Switzerland) Limited is a member of the Henry Ansbacher Group, 
a well-established private specialist banking organization. Prior to that he    
worked with a Paribas Group Company where he became Managing Director in 1989.  
From October 1982 to December 1986, Mr. Specker was with BBC AG Brow, Boveri &  
Cie (now ABB), undertaking assignments both in sales of large turnkey projects  
and as a management consultant. Prior to that he worked with another Swiss      
industrial group with assignments in Geneva and Birmingham, England. Mr.        
Specker serves on the boards of several other companies.                        

Erich Sager has served as Glyko's President and Chief Executive Officer   
since June 2000. Since September 1996, Mr. Sager has served as the Chairman of  
LaMont Asset Management SA, a private investment management firm. From April    
1994 to August 1996, Mr. Sager served as Senior Vice President, Head of Private 
Banking for Dresdner Bank (Switzerland) Ltd. From September 1991 to March 1994, 
Mr. Sager served as Vice President, Private Banking-Head German Desk for        
Deutsche Bank (Switzerland) Ltd. From 1981 to 1989, Mr. Sager held various      
positions at a number of banks in Switzerland. Mr. Sager serves as a director   
of BioMarin, Restoragen, Inc., Dentalview, Inc., Kimsa Holding, LaMont Asset    
Management, SA and Sermont Asset Management, SA. Mr. Sager received a Business  
Degree from the School of Economics and Business Administration in Zurich,      
Switzerland.                                                                    

Meetings of the Board and its Committees                                        

  The board of directors manages the business of Glyko. It establishes overall
policies and standards for Glyko and reviews the performance of management. In  
addition, the board has established an audit committee whose functions are      
briefly described below. The board has not established a nominating committee.  
In June 2000, the board decided to assume the responsibilities of the           
compensation committee for making determinations regarding salaries, bonuses    
and other compensation and making decisions with respect to awards, including   
but                                                                             

141 

DEFM14A
155th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 155th
not limited to stock option grants to Glyko's directors and officers. The       
directors are kept informed of Glyko's operations at meetings of the board and  
its committees through reports and analyses from, and discussions with,         
management.                                                                     

During the fiscal year ended December 31, 2001, the board of directors met
on 13 occasions and took action by unanimous written consent on one occasion.   

Audit Committee                                                                 

The audit committee provides oversight of (i) Glyko's financial reporting 
processes, system of internal controls and audit process and (ii) Glyko's       
independent auditors. The audit committee also recommends to the board of       
directors the appointment of the independent certified public accountants. As   
of December 31, 2001, the members of the audit committee were Mr. Kolada, Mr.   
Trossman and Mr. Glaus. During the fiscal year ended December 31, 2001, the     
audit committee met once.                                                       

Compensation of Directors                                                       

On January 29, 2001, each of the then directors and officers of Glyko was 
granted an option to purchase 5,000 common shares at an exercise price of       
Cdn.$4.50 per share, in lieu of monetary compensation, for services rendered    
and to be rendered in their capacity as directors and officers for 2001. David  
Allan, who was elected as a director of Glyko on September 20, 2001, was        
granted an option on January 15, 2002 to purchase 1,397 common shares at an     
exercise price of Cdn.$6.75 per share for services rendered in his capacity as  
a director of Glyko for the portion of 2001 that he served as such.             

On January 15, 2002, each director and officer of Glyko as of December 31,
2001, was granted an option to purchase 5,000 common shares at an exercise      
price of Cdn.$6.75, in lieu of monetary compensation, for services to be        
rendered in their capacity as directors and officers for 2002.                  

Directors' and Officers' Insurance                                              

Glyko has purchased a Cdn.$5,000,000 policy to insure against liabilities 
incurred by its directors and officers in connection with the performance of    
their duties. Glyko currently pays a premium of Cdn.$22,680 per year in respect 
of directors' and officers' insurance, which is subject to adjustment on the    
yearly renewal date. The policy carries a Cdn.$50,000 deductible with respect   
to all claims other than securities claims, which carry a Cdn.$75,000           
deductible.                                                                     

Section 16(a) Beneficial Ownership Reporting Compliance                         

 Section 16(a) of the United States Securities Exchange Act of 1934 requires
Glyko officers and directors, as well as persons who own 10 percent or more of  
a registered class of Glyko's equity securities, to file with the U.S.          
Securities and Exchange Commission initial reports of ownership and reports of  
changes in ownership of Glyko's common shares. Officers, directors and 10% or   
more shareholders are required by U.S. Securities and Exchange Commission       
regulations to furnish Glyko with copies of all Section 16(a) forms they file.  

To Glyko's knowledge, based solely on review of the copies of such reports
furnished to Glyko or written representations that no other reports were        
required, during the fiscal year ended December 31, 2001, all officers,         
directors, and 10% shareholders complied with all Section 16(a) filing          
requirements.                                                                   

142 

DEFM14A
156th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 156th
Executive Compensation                                                          

 Glyko is required to disclose compensation paid by it during the last three
fiscal years to (i) its Chief Executive Officer; (ii) its four most highly      
compensated executive officers, other than the Chief Executive Officer, who     
were serving as executive officers at the end of fiscal 2001; and (iii) any     
additional individual for whom such disclosure would have been provided under   
(ii) above but for the fact that the individual was not serving as an executive 
officer at the end of fiscal 2001; provided, however, that no disclosure need   
be provided for any executive officer, other than the CEO, whose total annual   
salary and bonus does not exceed Cdn.$100,000.                                  

  Glyko's officers receive no cash compensation. No executive officer received
total compensation, including salary, bonus, or other compensation, in excess   
of Cdn.$100,000 during the year ended December 31, 2001. Accordingly, the       
following table discloses compensation paid by Glyko during the last three      
fiscal years to (i) Mr. Erich Sager, Glyko's Chief Executive Officer beginning  
in June 2000; and (ii) Dr. John C. Klock, Glyko's Chief Executive Officer until 
June 2000. These officers are the "Named Executive Officers."                   

Summary Compensation Table  

                                                        [Enlarge/Download Table]

                                                                            Long-Term                  
                                                                           Compensation                
                                           Annual Compensation               (Cdn.$)                   
                                  ------------------------------------- ------------------             
                                                                         Number of Shares   All Other  
                                                         Other Annual   Underlying Options Compensation
Name and Principal Position  Year Salary ($) Bonus ($) Compensation ($)    Granted (#)       (Cdn.$)   
---------------------------  ---- ---------- --------- ---------------- ------------------ ------------
                                                                                                       
Erich Sager(1).............. 2001     --        --            --              5,000           18,000(3)
  President and              2000     --        --            --              2,500           10,500(3)
 Chief Executive Officer     1999     --        --            --                 --               --   
John C. Klock, M.D.(2)...... 2001     --        --            --                 --               --   
  Former President and       2000     --        --            --              5,000               --   
 Chief Executive Officer     1999     --        --            --              4,000               --   

--------                                                                        
(1) Mr. Sager was appointed President and Chief Executive Officer in June 2000  
  following the election of directors at the annual meeting of shareholders.

(2) Dr. Klock served as Glyko's President and Chief Executive Officer from      
December 1992 until June 2000.                                          

(3) Mr. Sager is entitled to receive Cdn.$1,500 per month in connection with    
fees and expenses incurred as President and Chief Executive Officer of  
  Glyko, which entitlement commenced in June 2000. Mr. Sager received a lump
sum pre-payment of approximately Cdn.$42,300 in late 2000 for these fees
and expenses. As a result, as of May 2002, Mr. Sager has an outstanding 
prepaid balance of Cdn.$6,300.                                          

Stock Option Plan                                                               

Glyko has a stock option plan under which Glyko's board of directors may  
grant options to purchase shares of Glyko common shares to its directors,       
officers, consultants and key employees. The plan is administered by the board  
of directors. Options granted under the plan have an exercise price not less    
than the closing price of Glyko common shares on the Toronto Stock Exchange on  
the trading day immediately prior to the date of grant or the average of the    
bid and ask prices if no sales are reported on the Toronto Stock Exchange on    
such trading day. Options are exercisable over a number of years specified at   
the time of the grant which cannot exceed 10 years. The aggregate number of     
common shares subject to options granted under the plan cannot exceed 3,000,000 
common shares without shareholder approval and no one optionee is entitled to   
hold options exceeding 5% of the common shares outstanding. Also, the maximum   
number of shares which may be reserved for issuance under the plan may not      
exceed 10% of the Glyko common shares outstanding without shareholder approval. 

  In general, stock options granted under the plan terminate within 90 days of
the termination of an optionee's employment. Options also terminate within 6    
months of the death of the optionee. Options granted under the plan             

143 

DEFM14A
157th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 157th
are not transferable. As of the date hereof, 81,397 options (net of exercised   
and cancelled options) have been approved by the board of directors.            

Options are only granted in compliance with applicable securities         
legislation, and the plan is operated in conformity with the requirements of    
the Toronto Stock Exchange.                                                     

Fiscal 2001 Option Grants                                                       

The following table shows stock option grants to the Named Executive      
Officers during fiscal 2001.                                                    

                                                        [Enlarge/Download Table]

              Stock Option Grants in the Most Recently Completed Financial Year                
---------------------------------------------------------------------------------------------  
              Number of                                                                        
              Securities                  Exercise                                             
              Underlying Percent of Total   Price                    Market Value of Securities
               Options   Options Granted  Per Share   Option Term    Underlying Options on the 
  Name         Granted       in 2001       ($) (1)  Expiration Date  Date of Grant ($/Share)(1)
  ----        ---------- ---------------- --------- ---------------- --------------------------
                                                                                               
Erich Sager..   5,000           17%         4.50    January 28, 2005            5.00           

--------                                                                        
(1) All dollar values are stated in Canadian dollars. As of December 31, 2001,  
  the U.S. dollar to Canadian dollar exchange rate was $1.00 = Cdn. $0.6279.

Options Exercises/Fiscal Year Ended Value                                       

The following table shows stock option exercises and the value of         
unexercised stock options held by the Named Executive Officers during fiscal    
2001.                                                                           

AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL 
YEAR AND FY-END OPTION/SAR VALUES 

                                                        [Enlarge/Download Table]

                                       Number of Securities Underlying       Value of Unexercised       
                                        Unexercised Options at              in-the-money Options at     
                Shares                     December 31, 2001               December 31, 2001 (1)(2)     
              Acquired on    Value     ------------------------------- ---------------------------------
  Name         Exercise   Realized ($) Exercisable    Unexercisable    Exercisable ($) Unexercisable ($)
  ----        ----------- ------------ -----------    -------------    --------------- -----------------
                                                                                                        
Erich Sager..     --           --         7,500            --              18,750             --        

--------                                                                        
(1) Represents the positive difference between the closing price of Glyko's     
  common shares on December 31, 2001 of Cdn.$7.00 per share and the exercise
price of the options.                                                   

(2) All dollar values are stated in Canadian dollars. As of December 31, 2001,  
 the U.S. dollar to Canadian dollar exchange rate was $1.00 = Cdn.$0.6279.

Employment Contracts and Termination of Employment and Change of Control        
Arrangements                                                                    

None of the Named Executive Officers is a party to an employment agreement
with Glyko.                                                                     

144 

DEFM14A
158th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 158th
Performance Graph                                                               

The following graph compares the cumulative total shareholder return on   
Glyko common shares for the last five fiscal years with the cumulative total    
return on (i) the Toronto Stock Exchange 300 Composite Index and (ii) the       
Nasdaq Pharmaceutical Index.                                                    

COMPARISON OF CUMULATIVE TOTAL RETURN(1)  

[CHART] 

                                                                [Download Table]

                 The Company          TSE         Nasdaq Pharmaceutical Index
                                                                             

1996                100               100                     100            
1997                313               113                     151            
1998               1688               109                     223            
1999               1500               142                     200            
2000               1013               151                     275            
2001               1750               130                     227            

--------                                                                        
(1) The graph assumes that the value of the investment in the common shares and 
in each index was $100 at December 31, 1996. Does not give effect to    
fluctuations in the currency exchange rate between the U.S. and Canadian
dollar.                                                                 

The comparisons in this table are required by the securities regulatory   
authorities and, therefore, are not intended to forecast or be indicative of    
possible future performance of Glyko common shares.                             

Certain Relationships and Related Transactions                                  

  Since October 8, 1998, Glyko has agreed to pay BioMarin a monthly management
and reporting fee for its services to Glyko primarily relating to management,   
accounting, finance and government reporting.                                   

During 2001, Glyko paid BioMarin $7,700 per month with respect to this    
management fee.                                                                 

 Glyko pays legal fees to Blake, Cassels and Graydon LLP in which two of its
directors, Mr. Kolada and Mr. Trossman, are partners. These legal fees include  
fees for general corporate services and expenses incurred with respect to the   
transaction described herein.                                                   

145 

DEFM14A
159th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 159th
GLYKO MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

You should read the following in conjunction with Glyko's financial       
statements and the notes thereto appearing elsewhere in this Joint Proxy        
Circular. The forward-looking statements in this Joint Proxy Circular, Glyko's  
expectations regarding its future performance, liquidity and capital resources  
and other non-historical statements in this discussion include numerous risks   
and uncertainties, as described in the "Risk Factors" section of this Joint     
Proxy Circular. Glyko's actual results may differ materially from those         
contained in any forward-looking statements. You should read this discussion    
completely and with the understanding that Glyko's actual future results may be 
materially different from what it expects. Glyko may not update these           
forward-looking statements after the date of this Joint Proxy Circular, even    
though its situation will change in the future. All forward-looking statements  
attributable to Glyko are expressly qualified by these cautionary statements.   

  Glyko's management discussion and analysis of operations is based on Glyko's
financial statements which, in order to comply with Canadian securities         
regulatory requirements, are prepared in accordance with Canadian GAAP and are  
attached hereto as Annex J.                                                     

Overview                                                                        

As a result of Glyko's sale of Glyko, Inc. to BioMarin as of October 7,   
1998, Glyko has no operating activities and its principal asset is its          
investment in BioMarin. At this time, Glyko has no plans to commence any        
operating activities or to diversify its assets. Glyko is a Canadian holding    
company that at March 31, 2002 owned approximately 21.3% of the capital stock   
of BioMarin. Glyko records BioMarin's results of operations using the equity    
method of accounting.                                                           

On February 7, 2002, Glyko announced that it had reached a definitive     
agreement with BioMarin under which all of Glyko's outstanding shares will be   
acquired by BioMarin in exchange for up to 11,367,617 shares of BioMarin common 
stock. If the proposed purchase by BioMarin is approved by stockholders of      
BioMarin, Glyko shareholders, relevant regulatory authorities and the Superior  
Court of Justice (Ontario), Glyko will become a wholly-owned indirect           
subsidiary of BioMarin and will concurrently continue into British Columbia as  
a company with no operations.                                                   

In 1999, 2000 and 2001, Glyko recognized equity in losses of BioMarin of  
$10.2 million, $11.9 million and $18.9 million, respectively. These losses were 
offset by gains on reduction of share ownership of BioMarin of $26.8 million,   
$1.4 million and $30.5 million, respectively, generated by BioMarin stock sales 
to third parties. Glyko expects to continue to incur losses due to its share of 
BioMarin's net loss from the ongoing research and development of BioMarin's     
pharmaceutical product candidates through the second quarter of 2002 (until the 
proposed purchase of Glyko by BioMarin discussed above). The BioMarin losses do 
not have an impact on Glyko's cash position. BioMarin has an accumulated        
deficit of $174.7 million at March 31, 2002 and is expected to incur            
significant losses through 2004. However, based on the financings that BioMarin 
completed and its market capitalization, Glyko does not believe that there has  
been any impairment of its investment in BioMarin.                              

Results of Operations                                                           

Quarters Ended March 31, 2002 and 2001                                      

  Glyko does not engage in any operating activities, there were no revenues or
cost of revenues for the quarters ended March 31, 2002 and 2001 and there were  
no research and development expenses for the quarters ended March 31, 2002 and  
2001.                                                                           

Glyko's general and administrative expenses were $295,114 for the quarter 
ended March 31, 2002, an increase of $224,779 from general and administrative   
expenses of $70,335 incurred for the quarter ended                              

146 

DEFM14A
160th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 160th
March 31, 2001. This increase was primarily due to additional legal and other   
expenses associated with the proposed acquisition of Glyko by BioMarin. Glyko's 
general and administrative expenses for the quarters ended March 31, 2002 and   
2001 primarily represented legal fees, fees billed by BioMarin for management,  
accounting, finance and government reporting, and other expenses including      
press releases, transfer agent and audit and tax fees.                          

 Glyko's equity in loss of BioMarin for the quarter ended March 31, 2002 was
$3.3 million compared to $3.1 million for the quarter ended March 31, 2001, an  
increase of $0.2 million. This increase is due primarily to Glyko's percentage  
of the research and development expenses incurred by BioMarin in the first      
quarter of 2002, in support of BioMarin's Aldurazyme, Aryplase, Neutralase and  
Vibrilase product development programs.                                         

Glyko recorded a gain on reduction of share ownership in BioMarin of $2.5 
million for the quarter ended March 31, 2002 compared to a gain of $0.4 million 
for the same period of 2001. The increase was due to BioMarin's issuance of     
shares to Synapse shareholders relating to BioMarin's purchase of 100% of the   
outstanding stock of Synapse Technologies Inc.                                  

Glyko's interest income earned for the quarters ended March 31, 2002 and  
2001 of $686 and $36,407, respectively, resulted from earnings on cash invested 
in short-term interest bearing accounts. The decrease in interest income in the 
first quarter of 2002 as compared to the same period in 2001 resulted from a    
decrease in interest rates.                                                     

Years Ended December 31, 2001 and 2000                                      

Glyko's general and administrative expenses were $462,018 for 2001, an    
increase of $73,645 from the general and administrative expenses of $388,373    
incurred in 2000. The increase was primarily due to the additional legal        
expenses associated with the proposed acquisition of Glyko by BioMarin,         
Canadian taxes on interest due on the note receivable from shareholder, a new   
directors' and officers' liability insurance policy, and web site development   
and implementation expenses incurred in 2001, offset somewhat by reduced board  
of directors travel expenses in 2001. General and administrative expenses for   
the years ended December 31, 2001 and 2000 represented legal fees, fees billed  
by BioMarin for management, accounting, finance and government reporting, board 
of directors travel, Canadian tax on note receivable interest and other         
expenses including press releases, website expenses, insurance, transfer agent, 
printing, audit and tax, and postage.                                           

Glyko's equity in loss of BioMarin for 2001 was $18.9 million compared to 
$11.9 million for 2000, an increase of $7 million. The increase is due          
primarily to Glyko's percentage of the research and development expenses        
incurred by BioMarin in 2001, in support of BioMarin's Aldurazyme, Aryplase,    
Vibrilase and Neutralase product development programs, offset by a portion of   
the $4.4 million charge in the first quarter of 2000 associated with the        
closure of one of BioMarin's facilities.                                        

Glyko recorded a gain on reduction of share ownership in BioMarin of $30.5
million in 2001 compared to a gain of $1.4 million in 2000 generated by         
BioMarin stock sales to third parties. The increase was due to BioMarin's $96.6 
million follow-on offering in December 2001.                                    

Glyko's interest income earned in 2001 and 2000 of $123,491 and $120,518, 
respectively, resulted from earnings on cash invested in short-term interest    
bearing accounts and interest on a shareholder note receivable.                 

Years Ended December 31, 2000 and 1999                                      

Glyko's general and administrative expenses were $388,373 for 2000, an    
increase of $189,071 from the general and administrative expenses of $199,302   
incurred in 1999. The increase was primarily due to the additional legal        
expenses associated with the annual shareholder meeting and additional board    
travel expenses in connection with the election of a new slate of board members 
in June 2000. General and administrative expense                                

147 

DEFM14A
161st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 161st
includes legal fees, board expenses, fees billed by BioMarin for management,    
accounting, finance and government reporting, and other outside administrative  
support expenses.                                                               

Glyko's equity in loss of BioMarin for 2000 was $11.9 million compared to 
$10.2 million for 1999, an increase of $1.8 million. The increase was due to    
the increased net loss of BioMarin resulting from BioMarin's increased spending 
on its product candidates including Aldurazyme, Aryplase and Vibrilase.         

Glyko's gain on reduction of share ownership of BioMarin for 2000 was $1.4
million compared to $26.8 million for 1999. These amounts result from issuance  
of common stock by BioMarin to third parties. The amount reflected in 1999      
resulted from BioMarin's initial public offering and other private placements   
concurrent with its initial public offering in July 1999.                       

Glyko's interest income earned in 2000 and 1999 of $120,518 and $186,953, 
respectively, resulted from earnings on cash invested in short-term interest    
bearing accounts and, in 1999, includes interest earned on Glyko's convertible  
note from BioMarin until its conversion on July 23, 1999, and a note from a     
shareholder. The decrease in interest income in 2000 resulted from lower cash   
balances available for investment due to an additional investment in BioMarin   
of $4.4 million in April 1999.                                                  

Liquidity and Capital Resources                                                 

As compared to December 31, 2001, Glyko's combined cash and short-term    
investments position decreased by $25,427 in the first quarter of 2002 to $2.4  
million as of March 31, 2002 due to the use of cash for ordinary expenses.      

Glyko's combined cash and short-term investments position increased by    
$639,074 in 2001 to $2.4 million due to the repayment of a note receivable and  
accrued interest from a former officer of $880,000, offset by the use of cash   
for operating activities during the year ended December 31, 2001 of $241,000.   

 From Glyko's inception to March 31, 2002, it has recorded retained earnings
of approximately $15.1 million and it expects to incur losses due to its share  
of BioMarin's net loss resulting from the ongoing research and development of   
BioMarin's pharmaceutical product candidates until the proposed purchase of     
Glyko by BioMarin discussed above.                                              

  Glyko has no operating activities or operational employees. Since October 8,
1998, Glyko has agreed to pay BioMarin a monthly fee for its services to Glyko  
primarily relating to management, accounting, finance and government reporting. 
BioMarin had accrued receivables relating to these services of $23,000 and zero 
at March 31, 2002 and December 31, 2001, respectively. Accordingly, without     
further investment in other companies or technologies, Glyko believes that it   
has sufficient cash to sustain planned operations for the foreseeable future.   

Summary of Significant Accounting Policies                                      

Income Taxes                                                                

Because Glyko recognizes gains on the reduction of its share ownership of 
BioMarin when BioMarin sells stock to third parties, Glyko has reported         
significant cumulative net income. However, because BioMarin is expected to     
consume the majority of its stock sales proceeds in its research and            
development activities in coming years, Glyko does not expect that tax          
liabilities will ever crystallize related to these gains. Accordingly, no       
deferred taxes have been provided.                                              

At December 31, 2001, Glyko had net operating loss carryforwards for      
Canadian income tax purposes of approximately $1.7 million, which began to      
expire in 2000. A valuation allowance is placed on the net deferred tax assets  
to reduce them to an assumed net realizable value of zero.                      

148 

DEFM14A
162nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 162nd
Quantitative and Qualitative Disclosure about Market Risk                       

 As of March 31, 2002 and December 31, 2001, Glyko held 11,367,617 shares of
BioMarin's common stock representing 21.3% and 21.7%, respectively, of          
BioMarin's outstanding common stock. These securities represent substantially   
Glyko's only asset. These securities have been acquired for investment purposes 
rather than for trading purposes. The value of Glyko's common stock may be      
substantially influenced by the value of BioMarin's common stock. Following     
BioMarin's initial public offering in July 1999, BioMarin's common stock is     
traded on Nasdaq and the Swiss SWX New Market. There are many risks associated  
with the listing of these securities on two markets and with BioMarin's         
business itself. If the proposed acquisition of Glyko by BioMarin closes,       
Glyko's current shareholders will become direct stockholders of BioMarin.       

  Also as of March 31, 2002 and December 31, 2001, Glyko held $2.4 million and
$2.4 million in cash, respectively. Glyko believes there is no market exposure  
risk to the cash as it is currently in a liquid operating account.              

149 

DEFM14A
163rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 163rd
TAX CONSIDERATIONS FOR GLYKO SECURITYHOLDERS  

Canadian Tax Considerations for Glyko Shareholders                              

In the opinion of Blake, Cassels & Graydon LLP, Canadian counsel to Glyko,
the following is a summary of the principal Canadian federal income tax         
considerations under the Income Tax Act (Canada) generally applicable to a      
Glyko shareholder who participates in the arrangement and who, for purposes of  
such Act and at all relevant times, holds Glyko common shares and shares of     
BioMarin common stock as capital property, and who deals at arm's length with,  
and is not and will not be affiliated with, any of Glyko, BioMarin or BioMarin  
Nova Scotia. Glyko common shares and shares of BioMarin common stock will       
generally constitute capital property to a holder thereof unless the holder     
holds such securities in the course of carrying on a business or has acquired   
such securities in a transaction or transactions considered to be an adventure  
or concern in the nature of trade.                                              

This summary does not apply to a Glyko shareholder in respect of whom     
BioMarin is or will be a foreign affiliate within the meaning of the Income Tax 
Act (Canada), nor does it apply to holders of Glyko common shares who acquired  
such shares on the exercise of options to acquire Glyko common shares.          

  The Income Tax Act (Canada) contains "mark-to-market" provisions relating to
securities held by certain financial institutions. This summary does not take   
into account such mark-to-market rules and does not apply to any holders        
subject to such rules. Glyko shareholders that are "financial institutions" for 
purposes of such rules should consult their own tax advisors.                   

This summary is based upon the current provisions of the Income Tax Act   
(Canada), the regulations adopted thereunder and counsel's understanding of the 
current published administrative policies and assessing practices of the Canada 
Customs and Revenue Agency, all in effect as of the date hereof and a           
certificate of an officer of BioMarin with respect to certain factual matters.  
This summary also takes into account any proposed changes to the Income Tax Act 
(Canada) and regulations thereunder that have been publicly announced by the    
Canadian Minister of Finance prior to the date hereof and assumes that all such 
changes will be enacted as proposed. However, no assurances can be given that   
any such proposed changes to the Income Tax Act (Canada) and regulations will   
be enacted as proposed, or at all.                                              

This summary is not exhaustive of all possible Canadian federal income tax
considerations and, except for any proposed changes to the Income Tax Act       
(Canada) and regulations thereunder that are publicly announced by the Canadian 
Minister of Finance prior to the date hereof, does not take into account or     
anticipate any changes in law, whether by legislative, governmental or judicial 
decision or action, or any changes in the administrative policies and assessing 
practices of the Canada Customs and Revenue Agency. This summary does not take  
into account tax legislation or considerations of any province, territory or    
foreign jurisdiction. Provisions of provincial income tax legislation vary from 
province to province in Canada and may differ from federal income tax           
legislation. No advance income tax ruling has been sought or obtained from the  
Canada Customs and Revenue Agency to confirm the tax consequences of any of the 
transactions herein described.                                                  

This summary is of a general nature only and is not intended to be, nor   
should it be construed to be, legal, business or tax advice to any particular   
Glyko shareholder or BioMarin stockholder. Accordingly, Glyko shareholders and  
BioMarin stockholders should consult their own tax advisors for advice with     
respect to the income tax consequences to them of the transactions described    
herein having regard to their own particular circumstances.                     

For purposes of the Income Tax Act (Canada), all amounts relating to the  
acquisition, holding or disposition of Glyko common shares and shares of        
BioMarin common stock must be expressed in Canadian dollars, including          
dividends, adjusted cost base and proceeds of disposition. Amounts denominated  
in United States dollars must be converted into Canadian dollars based on the   
prevailing United States dollar exchange rate at the time such amounts arise.   

150 

DEFM14A
164th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 164th
Glyko Shareholders Resident in Canada                                           

The following portion of this summary is applicable to a Glyko shareholder
who, for the purposes of the Income Tax Act (Canada) and any applicable income  
tax treaty or convention, at all relevant times, is or is deemed to be a        
resident of Canada while holding Glyko common shares or shares of BioMarin      
common stock.                                                                   

Certain Glyko shareholders whose Glyko common shares might not otherwise  
qualify as capital property may be able to make an irrevocable election in      
accordance with subsection 39(4) of the Income Tax Act (Canada) to have every   
"Canadian security" (as defined in the Income Tax Act (Canada) and regulations  
thereunder) owned by such Glyko shareholder (which may include the Glyko common 
shares) in the taxation year of the election and in all subsequent taxation     
years deemed to be capital property. Glyko shareholders who do not hold their   
Glyko common shares as capital property should consult their own tax advisors   
for advice with respect to whether an election under subsection 39(4) is        
available and/or advisable in their particular circumstances.                   

Exchange of Glyko common shares for Shares of BioMarin common stock         

  A Glyko shareholder who exchanges Glyko common shares for shares of BioMarin
common stock will be considered to have disposed of such Glyko common shares    
for proceeds of disposition equal to the aggregate of (i) the fair market value 
of the shares of BioMarin common stock acquired by such Glyko shareholder on    
the exchange determined at the implementation time, and (ii) the amount of any  
cash receivable by such holder in respect of a fractional share of BioMarin     
common stock. Such Glyko shareholder will realize a capital gain (or capital    
loss) equal to the amount by which the proceeds of disposition of such Glyko    
common shares, net of any reasonable costs of disposition, exceed (or are less  
than) the adjusted cost base to the Glyko shareholder of such Glyko common      
shares immediately before the exchange (see "Taxation of Capital Gain or        
Capital Loss" below). The cost to a Glyko shareholder of shares of BioMarin     
common stock acquired on the exchange will be equal to the fair market value of 
such shares of BioMarin common stock at the time of the acquisition, to be      
averaged at any given time with the adjusted cost base of any other shares of   
BioMarin common stock held by the Glyko shareholder as capital property for the 
purposes of determining the holder's adjusted cost base of such shares of       
BioMarin common stock.                                                          

  In an Economic Statement released on October 18, 2000, the Canadian Minister
of Finance announced a proposal to formulate and introduce a rule to permit     
shares of a Canadian corporation held by a Canadian resident to be exchanged    
for shares of a foreign corporation on a tax-deferred basis. This statement     
included no details of the circumstances in which such tax-deferred             
share-for-share exchanges could occur but rather indicated that these rules     
would be developed in consultation with the private sector. The Minister's      
statement indicated that any such rule would not be effective before the public 
release of draft legislation including such rule.                               

It is not possible to accurately predict whether or not draft legislation 
containing the proposed rule described above will be released in time to affect 
the exchange by holders of their Glyko common shares for shares of BioMarin     
common stock, and it is unclear whether such rule (if developed and released in 
time) would apply to a holder on the exchange. However, holders of Glyko common 
shares should consult their own tax advisors if the draft legislation is        
released to determine how it might apply to their particular circumstances.     

Shares of BioMarin common stock                                             

(a) Dividends on Shares of BioMarin common stock                          

  Dividends on shares of BioMarin common stock will be required to be included
in the recipient's income for Canadian income tax purposes. Such dividends      
received by a Glyko shareholder who is an individual will not be subject to the 
gross-up and dividend tax credit rules in the Income Tax Act (Canada). A Glyko  
shareholder that is a corporation will include such dividends in computing its  
income and will not be entitled to deduct the amount of such dividends in       
computing its taxable income. A Glyko shareholder that is a Canadian-controlled 
private corporation may be liable to pay an additional refundable tax of 6 2/3% 
on such dividends. United States                                                

151 

DEFM14A
165th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 165th
non-resident withholding tax on dividends may be eligible for foreign tax       
credit or deduction treatment where applicable under the Income Tax Act         
(Canada). See the commentary below under the heading "United States Federal     
Income Tax Considerations for Glyko Shareholders."                              

(b) Acquisition and Disposition of Shares of BioMarin common stock        

 A disposition or deemed disposition of shares of BioMarin common stock by a
holder will generally result in a capital gain (or capital loss) to the extent  
that the proceeds of disposition, net of any reasonable costs of disposition,   
exceed (or are less than) the adjusted cost base to the holder of those shares  
of BioMarin common stock immediately before the disposition. See "Taxation of   
Capital Gain or Capital Loss."                                                  

Taxation of Capital Gain or Capital Loss                                    

Pursuant to the Income Tax Act (Canada), a Glyko shareholder will be      
required to include in income for the year of disposition one-half of any       
capital gain (a "taxable capital gain") and will generally be entitled to       
deduct one-half of any capital loss (an "allowable capital loss") from taxable  
capital gains realized in the year by the Glyko shareholder to the extent and   
in the circumstances described in the Income Tax Act (Canada). In addition, the 
portion of any such allowable capital loss, computed in accordance with the     
rules provided for in the Income Tax Act (Canada), which exceeds and is not     
otherwise deducted from taxable capital gains realized in the year, may         
generally be deducted from taxable capital gains realized in any of the three   
preceding taxation years or in any subsequent taxation year to the extent and   
in the circumstances described in the Income Tax Act (Canada). Any such capital 
loss may, in certain circumstances, be reduced by the amount of any dividends,  
including deemed dividends, which have been received by a Glyko shareholder     
that is a corporation on such shares (or shares substituted for such shares) to 
the extent and in the manner provided for in the Income Tax Act (Canada).       
Similar rules may apply where a corporation is a member of a partnership or a   
beneficiary of a trust that owns such shares, or where a trust or partnership   
of which a corporation is a beneficiary or a member is a member of a            
partnership or a beneficiary of a trust that owns such shares.                  

Capital gains realized by an individual including a trust, other than     
certain trusts, may give rise to alternative minimum tax under the Income Tax   
Act (Canada). A Glyko shareholder that is a "Canadian-controlled private        
corporation" (as defined in the Income Tax Act (Canada)) may be liable to pay   
an additional refundable tax of 6 2/3% on taxable capital gains.                

Foreign Property Information Reporting                                      

 In general, a "specified Canadian entity," as defined in the Income Tax Act
(Canada), for a taxation year or fiscal period whose total cost amount of       
"specified foreign property," as defined in the Income Tax Act (Canada), at any 
time in the year or fiscal period exceeds $100,000, is required to file an      
information return for the year or period disclosing prescribed information,    
including the cost amount, any dividends received in the year, and any gains or 
losses realized in the year, in respect of such property. With some exceptions, 
a taxpayer resident in Canada in the year will be a specified Canadian entity.  
Shares of BioMarin common stock will constitute specified foreign property to a 
holder. Accordingly, holders of shares of BioMarin common stock should consult  
their own tax advisors regarding compliance with these rules.                   

Dissenting Glyko Shareholders                                               

  A Glyko shareholder who dissents from the arrangement or the continuance (in
accordance with the interim order or the Canada Business Corporations Act, as   
applicable) is entitled, if the arrangement and continuance become effective,   
to receive from Glyko the fair value of the Glyko common shares held by such    
dissenting Glyko shareholder. The dissenting shareholder will be considered to  
have disposed of the Glyko common shares for proceeds of disposition equal to   
the amount received by such shareholder less the aggregate of the amount of any 
deemed dividend referred to below and the amount of any interest awarded by a   
Court (see "Taxation of                                                         

152 

DEFM14A
166th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 166th
Capital Gain or Capital Loss" above). The dissenting shareholder will also be   
deemed to receive a taxable dividend equal to the amount by which the amount    
received (other than in respect of interest awarded by a Court) exceeds the     
paid-up capital (for purposes of the Income Tax Act (Canada)) of such           
shareholder's Glyko common shares. In the case of a Glyko shareholder that is a 
corporation, in some circumstances, the amount of any such deemed dividend may  
be treated as proceeds of disposition and not as a dividend. Any interest       
awarded to a dissenting shareholder by a Court will be included in such         
shareholder's income for Canadian income tax purposes.                          

Proposed Amendments Relating to Foreign Investment Entities                 

 On August 2, 2001, the Minister of Finance of Canada released revised draft
legislation addressing the taxation of investments in certain non-resident      
entities which constitute "foreign investment entities." In general, the        
proposed rules apply to persons owning a "participating interest" (including    
shares, or rights to acquire shares) of a foreign investment entity that is not 
an "exempt interest" as defined. If BioMarin is a foreign investment entity,    
the shares of BioMarin common stock owned by a holder would potentially be      
subject to the proposed rules unless they constitute exempt interests. The      
proposed rules require an annual determination of whether BioMarin is a foreign 
investment entity and, if it is such an entity, whether the BioMarin common     
stock satisfies the exempt interest exemption referred to above.                

If the proposed rules apply, a holder of BioMarin common stock would      
generally be required to take into account in computing income, on an annual    
basis, any increase or decrease in the fair market value of BioMarin common     
stock owned by such holder under a new "mark-to-market" rule, and the holder    
would be required to recognize as ordinary income or loss, rather than as a     
capital gain or loss, any gain or loss realized on the disposition of such      
BioMarin common stock. In certain circumstances, alternative treatment would be 
available on an elective basis.                                                 

BioMarin would not constitute a foreign investment entity at a particular 
time, and accordingly these proposed rules would not apply to holders of        
BioMarin common stock, if, at the end of BioMarin's taxation year that includes 
the particular time, the "carrying value" of BioMarin's "investment property"   
is not greater than one-half of the "carrying value" of all of its property, or 
BioMarin's principal business is not an "investment business," as contemplated  
by these new rules. BioMarin has advised counsel that if the arrangement were   
completed today, it believes it would not, following the completion thereof, be 
a "foreign investment entity."                                                  

In any event, these rules will not apply to a holder if the holder's      
BioMarin common stock constitutes an "exempt interest." A holder's BioMarin     
common stock will constitute an exempt interest provided BioMarin is a resident 
of the United States and the shares of BioMarin common stock are widely held    
(within the meaning of the draft legislation) and actively traded (within the   
meaning of the draft legislation) and listed on a prescribed stock exchange     
(which currently includes Nasdaq) throughout the period during which the holder 
holds the BioMarin common stock, unless it is reasonable to conclude that the   
holder had a tax avoidance motive in acquiring the BioMarin common stock.       
BioMarin has advised counsel that it is of the view that, as of the date        
hereof, BioMarin is a resident of the United States and the shares of BioMarin  
common stock are widely held and actively traded. For these purposes, a holder  
will generally be considered to have a tax avoidance motive in acquiring the    
BioMarin common stock if it is reasonable to conclude that the main reasons for 
acquiring the shares of BioMarin common stock include deriving a benefit        
attributable to income derived from investment property, to profits or gains    
from the disposition of investment property or to an increase in value of       
investment property and the deferral or reduction of Canadian income tax that   
would have been payable by the holder had such holder realized such income,     
profits or gains at the time such income, profit or gains were realized by the  
owner of the investment property.                                               

The determination of whether BioMarin is a foreign investment entity and  
whether the BioMarin common stock constitutes an exempt interest must be made   
on an annual basis at the end of BioMarin's taxation year. Although no          
assurances can be given in this regard, BioMarin has advised counsel that it is 
not aware of any                                                                

153 

DEFM14A
167th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 167th
circumstances that would cause it to become a "foreign investment entity" or    
that would cause the relevant factors used in determining the status of         
BioMarin common stock as "exempt interests" (which are based on BioMarin's      
residence and the listing, holding and trading of shares of BioMarin common     
stock) to change.                                                               

 On December 17, 2001, the Canadian Minister of Finance announced a one-year
delay of the effective date of the proposed rules such that the rules are now   
proposed to apply to taxation years beginning after 2002. The Minister          
indicated that this delay will allow for full consideration of submissions that 
have been received concerning the proposed rules. It is impossible to           
accurately predict what changes, if any, may be made in the draft legislation,  
or indeed whether the draft legislation will be enacted in its current form or  
at all. Holders of BioMarin common stock are advised to consult their own tax   
advisors with respect to the potential effects, if any, to them of the proposed 
rules in their own circumstances.                                               

Eligibility for Investment in Canada                                        

Provided that the shares of BioMarin common stock are on a particular date
listed on a prescribed stock exchange for purposes of the Income Tax Act        
(Canada) (which currently includes Nasdaq), the shares will, on such date, be   
qualified investments under the Income Tax Act (Canada) for trusts governed by  
registered retirement savings plans, registered retirement income funds,        
deferred profit sharing plans and registered education savings plans.           

Shares of BioMarin common stock will be foreign property for purposes of  
Part XI of the Income Tax Act (Canada). Registered investments and trusts       
governed by registered retirement savings plans, registered retirement income   
funds, deferred profit sharing plans, registered pension plans and certain      
other persons described in Part XI of the Income Tax Act (Canada) are generally 
subject to a penalty tax on the cost amount of foreign property that they own   
in excess of certain limits. Under the current provisions of the Income Tax Act 
(Canada), the general limit is 30% of the cost amount of all property owned.    

Glyko Shareholders Not Resident in Canada                                       

The following portion of the summary is applicable to holders of Glyko    
common shares who, for purposes of the Income Tax Act (Canada) and any          
applicable income tax treaty or convention, are not, have not been and will not 
be resident or deemed to be resident in Canada at any time while holding Glyko  
common shares or shares of BioMarin common stock, who do not use or hold and    
are not deemed to use or hold at any time their Glyko common shares or shares   
of BioMarin common stock in carrying on a business in Canada, do not (and will  
not) hold Glyko common shares or shares of BioMarin common stock at any time as 
part of the business property of a permanent establishment in Canada or in      
connection with a fixed base in Canada, hold Glyko shares and shares of         
BioMarin capital stock at all times as capital property, and deal at arm's      
length with Glyko, BioMarin and BioMarin Nova Scotia and are not affiliated     
with any of these entities. Special rules, which are not discussed in this      
summary, may apply to a non-resident Glyko shareholder that is an insurer       
carrying on business in Canada and elsewhere.                                   

Disposition or Exchange of Glyko Common Shares or BioMarin Common Stock     

  A non-resident Glyko shareholder will not be subject to tax under the Income
Tax Act (Canada) on the exchange of Glyko common shares for shares of BioMarin  
common stock provided that the Glyko common shares either do not constitute     
"taxable Canadian property" or constitute taxable Canadian property that is     
"treaty-protected property" of the holder for purposes of the Income Tax Act    
(Canada). Such holder will not be subject to tax under the Income Tax Act       
(Canada) on a sale or other disposition of shares of BioMarin common stock      
provided such shares do not constitute "taxable Canadian property," or          
constitute taxable Canadian property that is "treaty-protected property."       

154 

DEFM14A
168th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 168th
Generally, Glyko common shares will not be taxable Canadian property to a 
non-resident holder at a particular time provided that the Glyko common shares  
are not deemed to be taxable Canadian property to the holder pursuant to the    
provisions of the Income Tax Act (Canada) and the Glyko common shares are       
listed on a prescribed stock exchange (which currently includes The Toronto     
Stock Exchange and Nasdaq), and the holder, persons with whom the holder does   
not deal at arm's length, or the holder together with such persons, does not    
own and has not owned (or had under option or an interest in) 25% or more of    
the issued shares of any class or series of the capital stock of Glyko at any   
time during the 60-month period immediately preceding the particular time.      
Provided BioMarin remains a non-resident corporation, shares of BioMarin common 
stock will not be taxable Canadian property unless more than 50% of the fair    
market value of such shares is derived from real property situated in Canada,   
Canadian resource properties or timber resource properties, or any combination  
thereof. Even if the Glyko common shares or shares of BioMarin common stock are 
considered to be taxable Canadian property, such shares will be considered      
treaty-protected property of a holder at any time for purposes of the Income    
Tax Act (Canada) if any income or gain from the disposition of such shares by   
the holder at that time would be exempt from tax under Part I of the Income Tax 
Act (Canada) under the terms of an applicable income tax treaty or convention.  
Shareholders whose shares constitute taxable Canadian property should consult   
their own tax advisors with respect to the availability of any relief under the 
terms of any applicable income tax treaty or convention in their particular     
circumstances. If the Glyko common shares or shares of BioMarin common stock,   
as applicable, do not constitute taxable Canadian property or are listed on a   
prescribed stock exchange for purposes of the Income Tax Act (Canada) at the    
time that they are disposed of by a non-resident holder, the non-resident       
holder will not be required to comply with the provisions of section 116 of the 
Income Tax Act (Canada), which requires notification to be given to the Canada  
Customs and Revenue Agency when certain property is disposed of.                

Dissenting Shareholders                                                     

Where a non-resident Glyko shareholder receives an amount of interest or a
taxable dividend upon the exercise of a right to dissent to the implementation  
of the arrangement or the continuance (see "Glyko Shareholders Resident in      
Canada--Dissenting Glyko Shareholders") such amount will be subject to Canadian 
withholding tax at a rate of 25% unless the rate is reduced under the           
provisions of an applicable income tax treaty or convention.                    

United States Federal Income Tax Considerations for Glyko Shareholders          

The following describes the material United States federal income tax     
consequences to U.S. Holders (as defined below) who receive BioMarin common     
stock and to Non-U.S. Holders (as defined below, and together with U.S.         
Holders, "Holders") who receive BioMarin common stock, all pursuant to the      
arrangement.                                                                    

 This discussion is limited to Holders who hold their Glyko common shares as
capital assets. It does not describe all of the tax consequences that may be    
relevant to a Holder in light of the Holder's particular circumstances or to    
Holders subject to special rules, such as:                                      

.   certain financial institutions;                                         

.   insurance companies;                                                    

.   tax-exempt entities;                                                    

.   partnerships or other entities classified as partnerships for U.S.      
federal income tax purposes;                                        

.   Holders who acquire Glyko common shares through the exercise of employee
      stock options or otherwise in connection with the performance of services;

.   dealers in securities or foreign currencies;                            

.   persons holding Glyko common shares as part of a hedge or as a position 
in a straddle;                                                      

155 

DEFM14A
169th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 169th
 .   persons who own (directly, indirectly or through attribution) 10% or more
of Glyko common shares;                                             

.   U.S. Holders whose functional currency is not the U.S. dollar; or       

.   persons subject to the alternative minimum tax.                         

 This discussion is based on current law including the Internal Revenue Code
of 1986, as amended (the "Code"), administrative pronouncements, judicial       
decisions and final, temporary and proposed Treasury Regulations, all as in     
effect on the date of this Joint Proxy Circular, and all of which are subject   
to change, retroactively or prospectively. Furthermore, no opinion of counsel   
has been obtained and no advance income tax ruling has been obtained from the   
U.S. Internal Revenue Service (the "IRS") regarding the tax consequences of any 
of the transactions described herein, and we cannot assure you that the IRS     
will take the same view of the tax consequences of the arrangement as the view  
expressed herein. The discussion set forth below is for general information     
only. The discussion does not address aspects of U.S. taxation other than U.S.  
federal income taxation, nor does it address other federal, state, local or     
non-U.S. tax consequences of the arrangement.                                   

Accordingly, Holders are urged to consult their tax advisors with regard  
both to the application of the U.S. federal income tax laws to their particular 
situations and to any tax consequences arising under the laws of any U.S.       
federal, state, local or foreign taxing jurisdiction.                           

U.S. Federal Income Tax Consequences to U.S. Holders                            

As used herein, the term "U.S. Holder" means a beneficial owner of Glyko  
common shares that is, for U.S. federal income tax purposes:                    

.   an individual citizen or resident of the U.S.;                          

.   a corporation, or other entity taxable as a corporation for U.S. federal
 income tax purposes, created or organized in or under the laws of the
U.S. or of any political subdivision thereof;                       

.   an estate the income of which is subject to U.S. federal income tax     
regardless of its source; or                                        

.   a trust, in general, if a U.S. court is able to exercise primary        
     supervision over its administration and one or more U.S. persons have the
authority to control all substantial decisions of the trust.        

The term "U.S. Holder" also includes certain former citizens and residents
of the U.S. If a partnership holds common stock, the tax treatment of a partner 
will generally depend upon the status of the partner and upon the activities of 
the partnership.                                                                

Exchange of Glyko common shares for BioMarin Common Stock                   

The arrangement is intended to qualify as a "reorganization" within the   
meaning of Section 368(a) of the Code. Subject to the "passive foreign          
investment company" ("PFIC") rules (discussed below), which may materially      
change the tax consequences of the arrangement to most U.S. Holders, and the    
other qualifications discussed herein, if the arrangement qualifies as a        
"reorganization," a U.S. Holder who exchanges its Glyko common shares in the    
arrangement: (i) will not recognize gain or loss upon such exchange; (ii) the   
aggregate tax basis of the BioMarin common stock received by a U.S. Holder will 
be the same as the U.S. Holder's aggregate adjusted tax basis in the Glyko      
common shares surrendered in exchange therefor; and (iii) the holding period of 
the BioMarin common stock received by a U.S. Holder will include the period     
during which the Glyko common shares surrendered in exchange were held.         

  A successful IRS challenge to the "reorganization" status of the arrangement
would result in a U.S. Holder recognizing gain or loss with respect to the      
Glyko common shares surrendered in the arrangement, equal to the difference     
between the U.S. Holder's adjusted tax basis in such Glyko common shares and    
the fair market value, as of the effective date of the arrangement, of the      
BioMarin common stock received in exchange. Any such gain                       

156 

DEFM14A
170th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 170th
would be subject to tax in accordance with the PFIC rules discussed below. A    
U.S. Holder's aggregate adjusted tax basis in the BioMarin common stock         
received would equal the fair market value of such BioMarin common stock as of  
the effective date of the arrangement, and the U.S. Holder's holding period for 
such BioMarin common stock would begin the day after the effective date of the  
arrangement.                                                                    

Passive Foreign Investment Company                                          

In general, a non-U.S. corporation such as Glyko will be a PFIC if (i) 75%
or more of its gross income in a taxable year falls within specific categories  
of passive income, including interest, dividends or rents, or (ii) 50% or more  
of the assets of the corporation in a taxable year consists of assets that      
either produce, or are held for the production of, passive income. Generally,   
capital stock held by a non-U.S. corporation is treated as an asset held for    
the production of passive income; however, if a non-U.S. corporation holds      
(directly or indirectly) at least 25% of the capital stock (by value) of        
another corporation, the value of the subsidiary's stock generally is ignored   
and the non-U.S. corporation's proportionate share of the subsidiary's assets   
and income are treated as its own for the purpose of determining whether or not 
such non-U.S. corporation is a PFIC.                                            

As of October 7, 1998, Glyko's principal asset has been (and continues to 
be) BioMarin capital stock. From October 7, 1998 until approximately December   
13, 2001, Glyko owned at least 25% of the capital stock (by value) of BioMarin. 
As of approximately December 13, 2001 through the present, Glyko has owned (and 
continues to own) less than 25% (by value) of the capital stock of BioMarin. As 
a result, for its financial year beginning January 1, 2002, Glyko likely will   
be a PFIC. In addition, although the matter is not free from doubt, for its     
fiscal year ended December 31, 2001, Glyko may have been a PFIC. Glyko makes no 
representations whether it was or was not a PFIC for any other fiscal year.     
Glyko common shares will be treated as stock in a PFIC held by a U.S. Holder    
if, at any time during the holding period of such stock, Glyko is a PFIC.       

In general, Glyko's status as a PFIC should not change the consequences   
discussed above provided, among other things, the arrangement qualifies as a    
"reorganization" within the meaning of Section 368(a) of the Code. Assuming the 
arrangement qualifies as a "reorganization" and Glyko is a PFIC in 2002, under  
proposed U.S. Treasury Regulations, a U.S. Holder will not recognize gain on    
the exchange of Glyko common shares for BioMarin common stock if (i) the        
adjusted tax basis of the exchanged Glyko common shares in the hands of the     
actual owner for tax purposes, BioMarin Acquisition (Del.) Inc. in this case,   
is no greater than the adjusted tax basis of the stock in the hands of the U.S. 
Holder immediately prior to the exchange; (ii) BioMarin Acquisition (Del.)      
Inc.'s holding period in the Glyko common shares will be at least as long as    
the U.S. Holder's holding period immediately before the exchange; and (iii) the 
aggregate ownership of the U.S. Holder and BioMarin Acquisition (Del.) Inc.     
after the exchange is the same or greater than the U.S. Holder's proportionate  
ownership immediately before the exchange. If any of these requirements is not  
met, or if the arrangement fails to qualify as a "reorganization," U.S. Holders 
will be treated as if they had disposed of their Glyko common shares in a       
taxable transaction and will be required to recognize gain, if any, on the      
receipt of the BioMarin common stock. U.S. Holders would be able to recognize a 
loss only to the extent that a loss would be recognized under another provision 
of the Code.                                                                    

Any gain recognized would generally be equal to the difference between (i)
the fair market value as of the effective date of the arrangement of the        
BioMarin common stock received pursuant to the arrangement, and (ii) such U.S.  
Holder's adjusted tax basis in its Glyko common shares surrendered pursuant to  
the arrangement. Such gain will be calculated as if the gain were realized      
ratably over the holding period during which such U.S. Holder held such Glyko   
common shares. Gain treated as realized in the year of the disposition and each 
year prior to the year during which Glyko first became a PFIC generally will be 
taxable as ordinary income in the year of the disposition. Gain treated as      
realized in each of the other years during which the U.S. Holder held such      
Glyko common shares generally will be subject to U.S. federal income tax at the 
maximum ordinary income tax rates applicable in the year to which the gain was  
treated as realized, plus an interest-like charge. Such interest like charge    
will apply to the tax amount for the period from the year to which the gain is  
treated as realized through the due date of the U.S. Holder's federal income    
tax return for the year that includes the date of the                           

157 

DEFM14A
171st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 171st
disposition. A U.S. Holder's resulting adjusted tax basis in the BioMarin       
common stock received as a result of the arrangement will be equal to the fair  
market value of such stock received as of the effective date of the arrangement 
and its holding period would begin the day after the effective date of the      
arrangement. Under proposed U.S. Treasury Regulations, this result would not    
apply to a U.S. Holder who had made a timely election to treat Glyko as a       
"qualified electing fund" ("QEF") that has been in effect for all of the        
taxable years during such U.S. Holder's holding period that Glyko was a PFIC.   
U.S. Holders of Glyko common shares that have not made such an election should  
consult their tax advisors about making such an election. Special rules apply   
if a U.S. Holder made a QEF election that was not effective as of the first     
year during which such U.S. Holder's ownership of Glyko common shares           
constituted stock in a PFIC.                                                    

  THE APPLICATION OF THE PFIC RULES IS COMPLEX AND OFTEN DISADVANTAGEOUS. U.S.
HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE CONSEQUENCES OF   
HOLDING AND DISPOSING OF STOCK OF A PFIC AND MAKING QEF ELECTIONS.              

Requirement of Notice Filings                                               

Any U.S. Holder who receives BioMarin common stock pursuant to the        
arrangement may be required to file notices with the IRS providing certain      
information relating to the arrangement, including the notices required under   
Sections 1.367(b)-1 and 1.368-3 of the U.S. Treasury Regulations and Section    
1.1291-6(g) of the proposed U.S. Treasury Regulations. In addition, U.S.        
Holders may be required to file an IRS Form 8621. Pursuant to the terms of the  
arrangement agreement, upon request of any former Holder of Glyko common        
shares, BioMarin shall provide (or cause Glyko to provide) such Holder with any 
information necessary for such Holder to comply with any U.S. tax filings       
related to such Holder's ownership or disposition of Glyko common shares. Each  
U.S. Holder is advised to consult its tax advisor with respect to the           
requirements of such filings and any tax reporting requirements.                

Dissenting U.S. Holders                                                     

 Holders of Glyko common share are permitted to dissent from the arrangement
in the manner set out in Section 190 of the Canada Business Corporations Act. A 
dissenting U.S. Holder will be entitled, in the event the arrangement becomes   
effective, to receive from Glyko the fair value of the shares held by such U.S. 
Holder. Subject to the PFIC rules described above, a U.S. Holder who exercises  
rights of dissent in connection with the arrangement will generally recognize   
gain or loss equal to the difference between the U.S. dollar value of any       
payment other than interest received from Glyko (according to the dissenting    
shareholder's method of accounting) and such dissenting U.S. Holder's aggregate 
adjusted tax basis in the Glyko common shares in respect of which such          
dissenting U.S. Holder dissented. Any interest will be taxed as ordinary income.

U.S. Federal Income Tax Consequences to Non-U.S. Holders                        

 As used herein, the term "Non-U.S. Holder" means any person who holds Glyko
common shares other than a person who is a U.S. Holder.                         

Sale or Exchange of Glyko Common Shares or BioMarin Common Stock            

A Non-U.S. Holder generally will not be subject to U.S. federal income tax
on any gain realized as a result of an exchange of Glyko common shares for      
BioMarin common stock, cash or any combination thereof pursuant to the          
arrangement, or on any gain realized as a result of a subsequent sale of        
BioMarin common stock, unless (i) such gain is effectively connected with the   
conduct by the Non-U.S. Holder of a trade or business in the U.S. or, if a tax  
treaty applies, is attributable to a permanent establishment of the Non-U.S.    
Holder in the U.S.; or (ii) in the case of gain recognized by an individual     
Non-U.S. Holder, such individual is present in the U.S. for 183 days or more    
during the taxable year of disposition and certain other conditions are met.    
Non-U.S. Holders                                                                

158 

DEFM14A
172nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 172nd
meeting either (i) or (ii) above will generally be taxed in the same manner as  
U.S. Holders (see "Tax Consequences to U.S. Holders" above).                    

Dividends Paid on BioMarin Common Stock                                     

Dividends, if any, paid to a Non-U.S. Holder of BioMarin common stock will
generally be subject to U.S. federal withholding tax at a rate of 30%, or such  
lower rate as provided by an applicable treaty between the U.S. and the country 
of residence of the Non-U.S. Holder. If the dividends are effectively connected 
with the Non-U.S. Holder's conduct of a trade or business in the U.S. or, if a  
tax treaty applies, are attributable to a permanent establishment of the        
Non-U.S. Holder in the U.S., Non-U.S. Holders generally will be taxed in the    
same manner as are U.S. Holders, at ordinary U.S. federal income tax rates. A   
Non-U.S. Holder may be required to satisfy certain certification requirements   
to claim treaty benefits or otherwise claim a reduction of, or exemption from,  
the U.S. federal withholding tax described above. Any effectively connected     
income of a corporate Non-U.S. Holder may be subject to an additional "branch   
profits tax."                                                                   

Backup Withholding and Information Reporting                                    

 Generally, BioMarin or any other appropriate person must report annually to
the IRS the amount of dividends paid to or proceeds received by the recipient   
from the sale of BioMarin's stock, the name and address of the recipient, and   
the amount, if any, of tax withheld. A similar report is sent to the Holder.    
Pursuant to tax treaties or other agreements, the IRS may make its reports      
available to tax authorities in the recipient's country of residence.           

U.S. federal backup withholding tax is imposed on applicable payments to  
persons that fail to establish that they are entitled to an exemption or to     
provide a correct taxpayer identification number and other information to the   
payer. This backup withholding tax is imposed at a rate of 30% during 2002 and  
2003, with reductions thereafter.                                               

 Under current U.S. Treasury Regulations, the payment of the proceeds of the
disposition of common stock to or through the U.S. office of a broker is        
subject to information reporting and backup withholding unless the Holder       
certifies its non-U.S. status under penalties of perjury or otherwise           
establishes an exemption. Generally, the payment of the proceeds of the         
disposition by a Non-U.S. Holder of common stock outside the U.S. to or through 
a foreign office of a broker will not be subject to backup withholding but will 
be subject to information reporting requirements if the broker is:              

.   a U.S. person;                                                          

.   a "controlled foreign corporation" for U.S. federal income tax purposes;

 .   a foreign person 50% or more of whose gross income for certain periods is
from the conduct of a U.S. trade or business; or                    

 .   a foreign partnership if at any time during its tax year, (a) one or more
    of its partners are U.S. persons, as defined for U.S. federal income tax
purposes, who in the aggregate hold more than 50% of the income or  
   capital interests in the partnership, or (b) the foreign partnership is
engaged in a U.S. trade or business;                                

unless the broker has documentary evidence in its files of the Holder's         
non-U.S. status and certain other conditions are met, or the holder otherwise   
establishes an exemption. Neither backup withholding nor information reporting  
generally will apply to a payment of the proceeds of a disposition of common    
stock by or through a foreign office of a foreign broker not subject to the     
preceding sentence.                                                             

  Backup withholding is not an additional tax. Rather, the U.S. federal income
tax liability of persons subject to backup withholding will be reduced by the   
amount of tax withheld. If withholding results in an overpayment of taxes, a    
refund may be obtained, provided that the required information is furnished to  
the IRS.                                                                        

159 

DEFM14A
173rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 173rd
 TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF THE ARRANGEMENT TO
THE GLYKO SHAREHOLDERS WILL DEPEND ON THEIR PARTICULAR CIRCUMSTANCES, AS WELL   
AS THE PFIC STATUS OF GLYKO. THIS DISCUSSION SHOULD NOT BE CONSIDERED TAX       
ADVICE, AND HOLDERS ARE STRONGLY ADVISED TO CONSULT THEIR OWN TAX ADVISORS      
CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE  
ARRANGEMENT.                                                                    

160 

DEFM14A
174th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 174th
COMPARISON OF SHAREHOLDER RIGHTS  

In the event that the transaction is consummated, holders of Glyko common 
shares will have their Glyko common shares exchanged for shares of BioMarin     
common stock.                                                                   

BioMarin is incorporated under the Delaware General Corporation Law and,  
accordingly, is governed by Delaware law and the BioMarin certificate of        
incorporation and bylaws. Glyko is incorporated under the Canada Business       
Corporations Act and, accordingly, is governed by the laws of Canada and the    
Glyko articles and bylaws.                                                      

While the rights and privileges of stockholders of a Delaware corporation 
are, in many instances, comparable to those of shareholders of a Canada         
Business Corporations Act corporation, there are certain differences. The       
following is a summary discussion of the most significant differences in        
shareholder rights. These differences arise from differences between the        
Delaware General Corporation Law and the Canada Business Corporations Act and   
between the BioMarin certificate of incorporation and bylaws and the Glyko      
articles and bylaws. This summary is not intended to be complete and is         
qualified in its entirety by reference to Delaware law, Canadian law and the    
governing corporate instruments of BioMarin and Glyko. For a description of the 
respective rights of the holders of shares of BioMarin common stock and Glyko   
common shares see, respectively, "BioMarin Capital Stock" and "Glyko Share      
Capital."                                                                       

Voting Rights                                                                   

  Under the Delaware General Corporation Law, unless otherwise provided in the
bylaws or certificate of incorporation, each stockholder is entitled to one     
vote per share held by such holder. The certificate of incorporation of         
BioMarin does entitle each holder of BioMarin common stock to one vote per      
share.                                                                          

Under the Canada Business Corporations Act, unless the articles provide   
otherwise, each share of a corporation entitles the holder thereof to one vote  
at a meeting of shareholders. With the exception of the election of directors   
in which case cumulative voting rights apply as more fully described below, the 
articles of incorporation of Glyko do not provide otherwise.                    

Required Vote for Extraordinary Transactions                                    

Under the Delaware General Corporation Law, a merger or consolidation of a
corporation such as BioMarin generally requires, in addition to the adoption of 
a plan of merger by the board of directors, the adoption of the agreement by    
the affirmative vote of a majority of the outstanding stock of such corporation 
entitled to vote on the transaction, and, in certain situations, the            
affirmative vote by the holders of a majority of all outstanding shares of      
certain classes or series of stock. Where the corporation owns at least 90% of  
the outstanding stock of each class of stock of another corporation,            
stockholder approval is not required under the Delaware General Corporation Law 
from either corporation to merge the subsidiary corporation into the parent     
provided that such merger is permitted by the jurisdiction of incorporation of  
each constituent corporation.                                                   

 Under the Canada Business Corporations Act, certain extraordinary corporate
actions, such as certain amalgamations (other than with a direct or indirect    
wholly-owned subsidiary), continuances, and sales, leases or exchanges of all   
or substantially all the property of a corporation other than in the ordinary   
course of business, and other extraordinary corporate actions such as           
liquidations, dissolutions and (if ordered by a court) arrangements, are        
required to be approved by special resolution. A special resolution is a        
resolution passed at a meeting by not less than two-thirds of the votes cast by 
the shareholders who voted in respect of the resolution or signed by all        
shareholders entitled to vote on the resolution. In certain cases, a special    
resolution to approve an extraordinary corporate action is also required to be  
approved separately by the holders of a class or series of shares, including in 
certain cases a class or series of shares not otherwise carrying voting rights. 

161 

DEFM14A
175th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 175th
Vote Required for Ordinary Transactions; Quorum                                 

Under the Delaware General Corporation Law, a corporation's certificate of
incorporation and bylaws may specify the number of shares necessary to          
constitute a quorum at any meeting of shareholders; provided, however, that a   
quorum may not consist of less than one-third of the shares entitled to vote at 
the meeting. The BioMarin bylaws provide that the presence in person or by      
proxy of the holders of a majority of the total voting power of BioMarin then   
outstanding and entitled to vote at any meeting will constitute a quorum for    
the transaction of business at that meeting.                                    

Under the Delaware General Corporation Law, matters requiring stockholder 
approval generally must be approved by the vote of the holders of a majority of 
the shares present in person or represented by proxy at the meeting and         
entitled to vote on the matter.                                                 

The Canada Business Corporations Act provides that, unless the bylaws of a
corporation otherwise provide, a quorum of shareholders is present at a meeting 
of shareholders, irrespective of the number of persons actually present at the  
meeting, if the holders of a majority of the shares entitled to vote at the     
meeting are present in person or represented by a proxy at such meeting. The    
bylaws of Glyko provide that a quorum for the transaction of business at any    
meeting of shareholders shall be two persons present in person, each being a    
shareholder entitled to vote or a duly appointed proxyholder, and together      
holding or representing at least 33% of the outstanding shares of Glyko         
entitled to vote at the meeting.                                                

Cumulative Voting                                                               

Under the Delaware General Corporation Law, cumulative voting in the      
election of directors is not mandatory, and for cumulative voting to be         
effective it must be expressly provided for in the certificate of               
incorporation. In an election of directors under cumulative voting, each share  
of stock normally having one vote is entitled to a number of votes equal to the 
number of directors to be elected. A shareholder may then cast all such votes   
for a single candidate or may allocate them among as many candidates as the     
shareholder may choose. Without cumulative voting, the holders of a majority of 
the shares present at an annual meeting would have the power to elect all the   
directors to be elected at that meeting, and no person could be elected without 
the support of holders of a majority of the shares. BioMarin's certificate of   
incorporation and bylaws do not provide for cumulative voting in the election   
of its directors.                                                               

 Under the Canada Business Corporations Act, unless a corporation's articles
provide otherwise, there is no cumulative voting for the election of directors. 
Glyko's articles indicate that every shareholder entitled to vote at an         
election of directors has the right to cast a number of votes equal to the      
number of votes attached to the shares held by him or her multiplied by the     
number of directors to be elected, and he or she may cast all such votes in     
favour of one candidate or distribute them among the candidates in such manner  
as he or she sees fit.                                                          

Calling a Stockholders' Meeting                                                 

 Under the Delaware General Corporation Law, a stockholders' meetings may be
called by the directors or any other person authorized to do so in the          
certificate of incorporation or the bylaws of the corporation. The certificate  
of incorporation and bylaws of BioMarin state that a stockholders' meetings may 
be called by the Chairman of BioMarin's board of directors or by a majority of  
the then current members of the board of directors. Under the Delaware General  
Corporation Law an annual meeting of stockholders may be mandated by the        
Delaware Court of Chancery upon application by a stockholder or a director if   
there is a failure to hold the annual meeting or to take action by written      
consent to elect directors in lieu of an annual meeting for a period of 30 days 
after the date designated for the annual meeting or, if no date has been        
designated, for a period of 13 months after the latest to occur of the          
organization of the corporation, its last annual meeting or the last action by  
written consent to elect directors in lieu of an annual meeting.                

 Under the Canada Business Corporations Act, the holders of not less than 5%
of the issued shares of a corporation that carry the right to vote at the       
meeting sought to be held may requisition the directors to call a               

162 

DEFM14A
176th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 176th
meeting of shareholders. Upon meeting the technical requirements set out in the 
Canada Business Corporations Act for making such a requisition, the directors   
of the corporation must call a meeting of shareholders within 21 days from      
receipt of the requisition. If they do not, the shareholders who made the       
requisition may call the meeting.                                               

Amendment of Certificate of Incorporation or Articles of Incorporation          

The Delaware General Corporation Law provides that in addition to approval
of a proposed amendment by a corporation's board of directors, the vote of      
holders of a majority in voting power of the outstanding shares entitled to     
vote is generally required to amend a corporation's certificate of              
incorporation, unless a greater proportion is otherwise specified in the        
corporation's certificate of incorporation. The Delaware General Corporation    
Law further provides that the holders of shares of a class shall be entitled to 
vote and to vote as a class on a proposed amendment to the certificate of       
incorporation if the amendment would exclude or limit their right to vote in    
any matter, subordinate their right by authorizing shares that have superior    
rights, increase or decrease the number of authorized shares of such class,     
change the par value of the shares of such class, or alter or change the        
relative rights, preferences or limitations of the shares of such class so as   
to affect them adversely.                                                       

Under the Canada Business Corporations Act, any amendment to the articles 
generally requires approval by special resolution.                              

Amendment of Bylaws                                                             

Under the Delaware General Corporation Law, stockholders entitled to vote 
have the power to adopt, amend or repeal bylaws. In addition, a corporation     
may, in its certificate of incorporation, confer such power upon the board of   
directors.                                                                      

 The BioMarin bylaws provide that the provisions of BioMarin's bylaws may be
amended or repealed or new bylaws may be adopted by the BioMarin stockholders   
entitled to vote; provided, however, BioMarin may, in its certificate of        
incorporation, confer the power to adopt, amend or repeal the bylaws upon its   
directors. BioMarin's certificate of incorporation authorizes its board of      
directors to make, alter, amend or repeal the bylaws of BioMarin. The fact that 
such power is conferred upon the directors does not divest the stockholders of  
the power, nor limit their power to adopt, amend or repeal bylaws.              

The Canada Business Corporations Act provides that unless the articles,   
bylaws or a unanimous shareholder agreement otherwise provide, the directors    
may, by resolution, make, amend or repeal any bylaws that regulate the business 
or affairs of a corporation. Where the directors make, amend or repeal a bylaw, 
they are required under the Canada Business Corporations Act to submit the      
bylaw, amendment or repeal to the shareholders at the next meeting of           
shareholders, and the shareholders may confirm, reject or amend the bylaw,      
amendment or repeal by an ordinary resolution, which is a resolution passed by  
a majority of the votes cast by shareholders who voted in respect of the        
resolution. If the directors of a corporation do not submit a bylaw, an         
amendment or a repeal to the shareholders at the next meeting of shareholders,  
the bylaw, amendment or repeal will cease to be effective, and no subsequent    
resolution of the directors to adopt, amend or repeal a bylaw having            
substantially the same purpose and effect is effective until it is confirmed or 
confirmed as amended by the shareholders.                                       

Dissenters' Appraisal Rights                                                    

The Delaware General Corporation Law provides that a stockholder of a     
corporation who has not voted for, or consented in writing to, a merger or      
consolidation of, sale of all or substantially all the assets of, or share      
exchange involving that corporation has the right to receive payment of the     
fair value of his shares, except that the right to receive payment of the fair  
value of his shares shall not be available:                                     

.   to a stockholder of the parent corporation in a merger of the parent and
its 90 percent owned subsidiary,                                    

163 

DEFM14A
177th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 177th
.   to a stockholder of the surviving corporation in a merger except when   
 such merger effects changes in the preferential, preemptive or voting
rights of the shares held by such stockholder; or                   

.   to a stockholder for the shares of any class or series of stock, which  
shares or depository receipts in respect thereof, at the record date
 fixed to determine the stockholders entitled to receive notice of the
     meeting of stockholders to vote upon the plan of merger or consolidation,
     were listed on a national securities exchange or designated as a national
     market system security on an interdealer quotation system by the National
  Association of Securities Dealers, Inc. or held of record by more than
2,000 holders.                                                      

The Canada Business Corporations Act provides that shareholders of a      
corporation governed thereunder who are entitled to vote on certain matters are 
entitled to exercise dissent rights and to be paid the fair value of their      
shares in connection therewith. The Canada Business Corporations Act does not   
distinguish for this purpose between listed and unlisted shares. Such matters   
include:                                                                        

.   any amalgamation with another corporation (other than with certain      
affiliated corporations);                                           

.   an amendment to the corporation's articles to add, change or remove any 
provisions restricting the issue, transfer or ownership of shares;  

.   an amendment to the corporation's articles to add, change or remove any 
restriction upon the business or businesses that the corporation may
carry on;                                                           

.   a continuance under the laws of another jurisdiction;                   

 .   a sale, lease or exchange of all or substantially all the property of the
corporation other than in the ordinary course of business;          

.   a court order permitting a shareholder to dissent in connection with an 
   application to the court for an order approving an arrangement proposed
by the corporation;                                                 

.   certain amendments to the articles of a corporation which require a     
separate class or series vote, provided that a shareholder is not   
entitled to dissent if an amendment to the articles is effected by a
court order approving a reorganization or by a court order made in  
connection with an action for an oppression remedy; or              

.   carrying out a going-private transaction or a squeeze-out transaction.  

Oppression Remedy                                                               

The Delaware General Corporation Law does not provide for an oppression   
remedy.                                                                         

The Canada Business Corporations Act provides an oppression remedy that   
enables a court to make any order, both interim and final, to rectify the       
matters complained of if the court is satisfied upon application by a           
complainant (as defined below) that:                                            

.   any act or omission of the corporation or an affiliate effects a result;

.   the business or affairs of the corporation or an affiliate are or have  
been carried on or conducted in a manner; or                        

.   the powers of the directors of the corporation or an affiliate are or   
have been exercised in a manner,                                    

that is oppressive or unfairly prejudicial to or that unfairly disregards the   
interest of any security holder, creditor, director or officer.                 

164 

DEFM14A
178th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 178th
A complainant includes:                                                   

.   a present or former registered holder or beneficial owner of securities 
of a corporation or any of its affiliates;                          

.   a present or former officer or director of the corporation or any of its
affiliates;                                                         

.   the director under the Canada Business Corporations Act; and            

 .   any other person who in the discretion of the court is a proper person to
make such application.                                              

The oppression remedy provides the court with an extremely broad and      
flexible jurisdiction to intervene in corporate affairs to protect shareholders 
and other complainants. While conduct which is in breach of fiduciary duties of 
directors or that is contrary to the legal right of a complainant will normally 
trigger the court's jurisdiction under the oppression remedy, the exercise of   
that jurisdiction does not depend on a finding of a breach of such legal and    
equitable rights. Furthermore, the court may order a corporation to pay the     
interim expenses of a complainant seeking an oppression remedy, but the         
complainant may be held accountable for such interim costs on final disposition 
of the complaint (as in the case of a derivative action). The complainant is    
not required to give security for costs in an oppression action.                

Shareholder Derivative Actions                                                  

  Under the Delaware General Corporation Law, stockholders may bring an action
in the right of a corporation, so long as the stockholder was a stockholder of  
the corporation at the time of the conduct in question or he or she obtained    
the stock thereafter by operation of law.                                       

Under the Canada Business Corporations Act, a complainant may apply to the
court for leave to bring an action in the name of and on behalf of a            
corporation or any subsidiary, or to intervene in an existing action to which   
any such corporation or subsidiary is a party, for the purpose of prosecuting,  
defending or discontinuing the action on behalf of the corporation or           
subsidiary. Under the Canada Business Corporations Act, no action may be        
brought and no intervention in an action may be made unless the court is        
satisfied that the complainant has given not less than 14 days notice to the    
directors of the corporation or its subsidiary of the complainant's intention   
to apply to the court and (i) the directors of the corporation or its           
subsidiary do not bring, diligently prosecute or defend or discontinue the      
action; (ii) the complainant is acting in good faith; and (iii) it appears to   
be in the interests of the corporation or its subsidiary that the action be     
brought, prosecuted, defended or discontinued. Under Canadian law, the court in 
a derivative action may make any order it thinks fit. In addition, under        
Canadian law, a court may order a corporation or its subsidiary to pay the      
complainant's interim costs, including reasonable legal fees and disbursements. 
Although the complainant may be held accountable for the interim costs on final 
disposition of the complaint, it is not required to give security for costs in  
a derivative action.                                                            

Director Qualifications                                                         

The Delaware General Corporation Law does not have any residency          
requirements.                                                                   

Twenty-five percent of the directors of most corporations governed by the 
Canada Business Corporations Act generally must be resident Canadians. If a     
corporation has less than 4 directors, at least one has to be a resident        
Canadian. The Canada Business Corporations Act also requires that a corporation 
whose securities are publicly traded shall have not fewer than three directors, 
at least two of whom are not officers or employees of the company or any of its 
affiliates.                                                                     

165 

DEFM14A
179th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 179th
Election of Directors                                                           

Under the Delaware General Corporation Law directors are elected at each  
annual stockholders meeting unless their terms are staggered. The certificate   
of incorporation may authorize the election of certain directors by one or more 
classes or series of shares, and the certificate of incorporation, an initial   
bylaw or a bylaw adopted by the required vote of stockholders may provide for   
staggered terms for the directors. The certificate of incorporation of BioMarin 
provides that the election of directors need not be by written ballot unless    
the bylaws of BioMarin shall at the time of any such election so provide. The   
bylaws of BioMarin provide that directors shall be elected at each annual       
meeting of stockholders to hold office until the next annual meeting.           

  Under the Canada Business Corporations Act, a director may be elected for up
to a three-year term or until the director's successor is elected. A director   
not elected for an expressly stated term holds office until the close of the    
first annual meeting of shareholders following his election or until his        
successor is elected.                                                           

Fiduciary Duties of Directors                                                   

Directors of corporations organized under the Delaware General Corporation
Law have fiduciary obligations to the corporation and to its stockholders.      
Pursuant to these fiduciary obligations, the directors must act in good faith   
and with the degree of care which an ordinarily prudent person in a like        
position would use under similar circumstances.                                 

Directors of corporations governed by the Canada Business Corporations Act
have fiduciary obligations to the corporation. Under the Canada Business        
Corporations Act, directors must act honestly and in good faith with a view to  
the best interests of the corporation, and must exercise the care, diligence    
and skill that a reasonably prudent person would exercise in comparable         
circumstances.                                                                  

Removal of Directors                                                            

Under the Delaware General Corporation Law, directors generally may be    
removed, with or without cause, by a vote of the holders of the majority of the 
shares being voted. The bylaws of BioMarin provide that unless otherwise        
restricted by statute, by the certificate of incorporation or by the bylaws,    
any director or the entire Board of Directors may be removed, with or without   
cause, by the holders of a majority of the shares then entitled to vote at an   
election of directors.                                                          

Under the Canada Business Corporations Act, provided that articles of the 
corporation do not provide for cumulative voting, shareholders of a corporation 
may by ordinary resolution passed at a special meeting remove any director or   
directors from office. If holders of a class or series of shares have the       
exclusive right to elect one or more directors, a director elected by them may  
only be removed by an ordinary resolution at a meeting of the shareholders of   
that class or series.                                                           

Filling Vacancies on the Board of Directors                                     

As permitted by the Delaware General Corporation Law, the BioMarin bylaws 
provide that any vacancy on the BioMarin board may be filled by the BioMarin    
board.                                                                          

Under the Canada Business Corporations Act, subject to the articles of the
corporation, a vacancy among the directors may be filled at a meeting of        
shareholders or by a quorum of directors except when the vacancy results from   
an increase in the number or minimum or maximum number of directors or from a   
failure to elect the appropriate number of directors required by the articles.  
Each director appointed holds office for the unexpired term of his or her       
predecessor unless his or her office is vacated earlier.                        

166 

DEFM14A
180th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 180th
Stockholder Action by Written Consent                                           

  Under the Delaware General Corporation Law, unless otherwise provided in the
certificate of incorporation, any action required to be taken or which may be   
taken at an annual or special meeting of stockholders may be taken without a    
meeting if a consent in writing is signed by the holders of outstanding stock   
having not less than the minimum number of votes that would be necessary to     
authorize or take such action at a meeting at which all shares entitled to vote 
thereon were present. BioMarin's certificate of incorporation provides that no  
action shall be taken by the stockholders of BioMarin except at an annual or    
special meeting of the stockholders called in accordance with the bylaws of     
BioMarin.                                                                       

Under the Canada Business Corporations Act, shareholder action without a  
meeting may be taken by written resolution signed by all shareholders who would 
be entitled to vote thereon at a meeting.                                       

Indemnification of Officers and Directors                                       

The Delaware General Corporation Law permits indemnification against      
expenses (including attorneys' fees), judgments, fines and amounts paid in      
settlement actually and reasonably incurred in connection with actions, suits,  
or proceedings in which an officer, director, employee or agent is a party by   
reason of the fact that he is or was such a director, officer, employee or      
agent of the corporation, or is or was serving at the request of the            
corporation as a director, officer, employee or agent of another entity or      
enterprise, if he acted in good faith and in a manner he reasonably believed to 
be in or not opposed to the best interests of the corporation and, in respect   
of any criminal action or proceeding, had no reasonable cause to believe his    
conduct was unlawful. However, in connection with actions by or in the right of 
the corporation, such indemnification is not permitted if such action has been  
settled or if such person has been adjudged liable to the corporation, unless   
the court in which the action or suit was brought determines that, under all of 
the circumstances such person is nonetheless fairly and reasonably entitled to  
indemnity for such expenses as the court deems proper. Under the BioMarin       
bylaws, BioMarin will indemnify directors and officers to the fullest extent    
permitted by law.                                                               

 The Delaware General Corporation Law also permits a corporation to purchase
and maintain insurance on behalf of its directors, officers, employees and      
agents against any liability which may be asserted against, or incurred by,     
such persons in their capacities as such, whether or not the corporation would  
have the power to indemnify such persons against such liabilities. BioMarin has 
purchased such insurance. The Delaware General Corporation Law further provides 
that the statutory provisions regarding indemnification are not exclusive of    
any right which may exist under any by-law, agreement vote of stockholders or   
independent directors, or otherwise.                                            

  The Canada Business Corporations Act provides that a corporation may advance
monies to a director, or officer or other individual for the costs, charges and 
expenses of a proceeding for which the corporation is permitted to indemnify    
such a person. The individual shall repay such monies if he or she does not     
fulfill the conditions for indemnification.                                     

Under the Canada Business Corporations Act, a corporation may indemnify a 
director or officer, a former director or officer or a person who acts or acted 
at the corporation's request as a director or officer of another body corporate 
(an "indemnifiable person"), against all costs, charges and expenses, including 
an amount paid to settle an action or satisfy a judgment, reasonably incurred   
by him or her in respect of any civil, criminal, investigative or               
administrative action or proceeding in which the indemnifiable person is        
involved because of their association with the corporation or such body         
corporate, if he or she was not judged by the court or other competent          
authority to have committed any fault or omitted to do anything that the        
individual ought to have done and: (i) he or she acted honestly and in good     
faith with a view to the best interests of such corporation; and (ii) in the    
case of a criminal or administrative action or proceeding that is enforced by a 
monetary penalty, he or she had reasonable grounds for believing that his or    
her conduct was lawful. An indemnifiable person is entitled under the Canada    
Business Corporations Act to such indemnity from the corporation if he or she   
was substantially successful on the merits in his or her defense of the action  
or proceeding and fulfilled the conditions set out in (i) and (ii) above. A     
corporation may, with the approval of a court, also indemnify an indemnifiable  
person in                                                                       

167 

DEFM14A
181st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 181st
respect of an action by or on behalf of the corporation or body corporate to    
procure a judgment in its favor, to which such person is made a party by reason 
of being or having been a director or an officer of the corporation or body     
corporate, if he or she fulfills the conditions set forth in (i) and (ii),      
above.                                                                          

Director Liability                                                              

The Delaware General Corporation Law provides that the charter of a       
corporation may include a provision which limits or eliminates the liability of 
directors to the corporation or its stockholders for monetary damages for       
breach of fiduciary duty as a director, provided such liability does not arise  
from certain prescribed conduct, including acts or omissions not in good faith  
or which involve intentional conduct, breach of the duty of loyalty, a knowing  
violation of law or gain of a financial profit or other advantage to which such 
director was not legally entitled. The BioMarin certificate of incorporation    
contains a provision, as permitted by the Delaware General Corporation Law,     
eliminating the personal monetary liability of directors for breach of duties   
as a director to the fullest extent permitted under the Delaware General        
Corporation Law.                                                                

 The Canada Business Corporations Act does not permit any such limitation of
a director's liability.                                                         

Anti-Takeover Provisions and Interested Stockholders                            

  Certain anti-takeover provisions of the Delaware General Corporation Law and
BioMarin's charter documents as currently in effect may make a change in        
control of the company more difficult, even if a change in control would be     
beneficial to the stockholders. BioMarin's anti-takeover provisions include     
provisions in the certificate of incorporation providing that stockholders'     
meetings may only be called by the Chairman of BioMarin's board of directors or 
by a majority of the then current members of the board of directors and         
providing that the stockholders may not take action by written consent.         
Additionally, its Board of Directors has the authority to issue 1,000,000       
shares of preferred stock and to determine the terms of those shares of stock   
without any further action by the stockholders. The rights of holders of its    
common stock are subject to the rights of the holders of any preferred stock    
that may be issued. The issuance of preferred stock, could make it more         
difficult for a third party to acquire a majority of the outstanding voting     
stock of the company. The Delaware General Corporation Law also prohibits       
corporations from engaging in a business combination with any holders of 15% or 
more of their capital stock until the holder has held the stock for three years 
unless, among other possibilities, the Board of Directors approves the          
transaction. The Board of Directors may use these provisions to prevent changes 
in the management and control of its company. Also, under applicable the        
Delaware General Corporation Law, its Board of Directors may adopt additional   
anti-takeover measures in the future.                                           

  The Canada Business Corporations Act does not contain a comparable provision
with respect to business combinations. However, policies of certain Canadian    
securities regulatory authorities, including Rule 61-501 of the Ontario         
Securities Commission, contain requirements in connection with "related party   
transactions." A related party transaction means, generally, any transaction by 
which an issuer, directly or indirectly, acquires or transfers an asset or      
acquires or issues treasury securities or assumes or transfers a liability from 
or to, as the case may be, a related party by any means in any one or any       
combination of transactions. "Related party" is defined in OSC Rule 61-501 and  
includes directors, senior officers and holders of at least 10% of the voting   
securities or of a sufficient number of any securities of the issuer to         
materially affect control of the issuer.                                        

  OSC Rule 61-501 requires more detailed disclosure in the proxy material sent
to securityholders in connection with a related party transaction, and, subject 
to certain exceptions, the preparation of a formal valuation of the subject     
matter of the related party transaction and any non-cash consideration offered  
therefor and the inclusion of a summary of the valuation in the proxy material. 
OSC Rule 61-501 also requires that, subject to certain exceptions, an issuer    
shall not engage in a related party transaction unless minority approval for    
the related party transaction has been obtained.                                

168 

DEFM14A
182nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 182nd
Transactions with Interested Directors or Officers                              

  The Delaware General Corporation Law provides that a contract or transaction
("transaction") between a Delaware corporation and one or more of its directors 
or officers (an "interested person"), or an entity in which such person is an   
officer or director or has a financial interest, is not void or voidable solely 
because of such interest, or solely because such interested person is present   
at or participates in a board or committee meeting approving the transaction or 
solely because such interested person's votes are counted for such purposes if: 

(a) the material facts of the relationship or interest and the transaction
    are disclosed in good faith or are known to the board or committee and
    the board or committee authorizes the transaction by a majority of the
     disinterested directors even though the disinterested directors be less
than a quorum;                                                    

(b) the material facts of the relationship or interest and the transaction
 are disclosed in good faith or are known to, and the transaction is
approved by, the stockholders; or                                 

(c) the transaction is fair as to the corporation at the time it is       
authorized, approved or ratified.                                 

Under the Canada Business Corporations Act, a director or officer must    
disclose any interest he or she has in a material contract or transaction with  
the corporation if the director or officer (i) is a party to the contract or    
transaction; (ii) is a director or an officer, or an individual acting in a     
similar capacity, of a party to the contract or transaction; or (iii) has a     
material interest in a party to the contract or transaction. This disclosure    
must describe the nature and extent of the interest in writing and must be      
provided in a timely manner. A director or officer with a material interest as  
so described may not generally vote on any resolution to approve such a         
contract, unless the contract or transaction (i) relates primarily to his or    
her remuneration as a director, officer, employee or agent of the corporation   
or an affiliate; (ii) is for indemnity or insurance; or (iii) is with an        
affiliate.                                                                      

169 

DEFM14A
183rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 183rd
DISSENTING SHAREHOLDER RIGHTS 

BioMarin                                                                        

Under the Delaware General Corporation Law, stockholders of BioMarin will 
not have dissenters' appraisal rights in connection with the transaction.       

Glyko                                                                           

Section 190 of the Canada Business Corporations Act provides shareholders 
with the right to dissent from certain resolutions of a corporation which       
effect extraordinary corporate transactions or fundamental corporate changes    
including resolutions approving a continuance, but does not expressly include   
resolutions approving an arrangement. However, the interim order expressly      
provides registered Glyko shareholders with the right to dissent from the Glyko 
arrangement resolution in accordance with the provisions of Section 190 of the  
Canada Business Corporations Act and the Plan of Arrangement. Any Glyko         
shareholder who dissents from the Glyko arrangement resolution in compliance    
with the interim order and Section 190 of the Canada Business Corporations Act  
and the Plan of Arrangement will be entitled, in the event the arrangement      
becomes effective, to be paid by Glyko the fair value of the Glyko common       
shares held by such dissenting shareholder determined as of the close of        
business on the day before the Glyko arrangement resolution is adopted.         

 Any Glyko shareholder who dissents from the Glyko continuance resolution in
compliance with Section 190 of the Canada Business Corporations Act will be     
entitled, in the event the continuance becomes effective, to be paid by Glyko   
the fair value of the Glyko common shares held by such dissenting shareholder   
determined as of the close of business on the day before the Glyko continuance  
resolution is adopted. Glyko shareholders may dissent from either or both of    
the arrangement and the continuance resolutions.                                

 The interim order and Section 190 provides that a shareholder may only make
a claim under that section with respect to all the shares of a class held by    
the shareholder on behalf of any one beneficial owner and registered in the     
shareholder's name. One consequence of this provision is that a Glyko           
shareholder may only exercise the right to dissent under Section 190 in respect 
of Glyko common shares which are registered in that shareholder's name. In many 
cases, shares beneficially owned by a person (a "non-registered holder") are    
registered either: (a) in the name of an intermediary that the non-registered   
holder deals with in respect of the shares (such as banks, trust companies,     
securities dealers and brokers, trustees or administrators of self-administered 
registered retirement savings plans (as defined under the Income Tax Act        
(Canada)), registered retirement income funds (as defined under the Income Tax  
Act (Canada)), registered education savings plans and similar plans, and their  
nominees); or (b) in the name of a clearing agency (such as The Canadian        
Depository for Securities Limited, or CDS) of which the intermediary is a       
participant. Accordingly, a non-registered holder will not be entitled to       
exercise the right to dissent under the interim order or Section 190 directly   
(unless the shares are re-registered in the non-registered holder's name). A    
non-registered holder who wishes to exercise the right to dissent should        
immediately contact the intermediary with whom the non-registered holder deals  
in respect of the shares and either:                                            

.   instruct the intermediary to exercise the right to dissent on the       
  non-registered holder's behalf (which, if the shares are registered in
  the name of CDS or other clearing agency, would require that the share
first be re-registered in the name of the intermediary); or         

.   instruct the intermediary to re-register the shares in the name of the  
     non-registered holder, in which case the non-registered holder would have
to exercise the right to dissent directly.                          

 A registered holder of Glyko common shares who wishes to dissent in respect
of its Glyko common shares must provide a dissent notice specifying the         
resolution against which he or she wishes to dissent to Glyko Biomedical Ltd.,  
199 Bay Street, Box 25, Commerce Court West, Suite 2800, Toronto, Ontario,      

170 

DEFM14A
184th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 184th
M5L 1A9, attention John A. Kolada, facsimile number (416) 863-2653, at or prior 
to the Glyko special meeting (or any adjournment thereof).                      

Glyko is required, within 10 days after the Glyko shareholders adopt the  
Glyko arrangement resolution or the Glyko continuance resolution, to notify     
each dissenting shareholder that the Glyko arrangement resolution or the Glyko  
continuance resolution, as applicable, has been adopted. Such notice is not     
required to be sent to any Glyko shareholder who voted for the Glyko            
arrangement resolution, if such resolution is adopted, or any Glyko shareholder 
who voted for the Glyko continuance resolution, if such resolution is adopted,  
or who has withdrawn his or her dissent notice.                                 

A dissenting shareholder who has not withdrawn his or her dissent notice  
must then, within 20 days after receipt of notice that the Glyko arrangement    
resolution and/or the Glyko continuance resolution, as applicable, has been     
adopted or, if the dissenting shareholder does not receive such notice, within  
20 days after he or she learns that the Glyko arrangement resolution and/or the 
Glyko continuance resolution has been adopted, send to Glyko a written notice   
containing his or her name and address, the number and class of Glyko common    
shares in respect of which he or she dissents, and a demand for payment of the  
fair value of such Glyko common shares. Within 30 days after sending a demand   
for payment, the dissenting shareholder must send to Glyko the certificates     
representing the Glyko common shares in respect of which he or she dissents. A  
dissenting shareholder who fails to send certificates representing the Glyko    
common shares in respect of which he or she dissents forfeits his or her right  
to dissent. The Glyko transfer agent will endorse on share certificates         
received from a dissenting shareholder a notice that the holder is a dissenting 
shareholder and will forthwith return the share certificates to the dissenting  
shareholder.                                                                    

 After sending a demand for payment, a dissenting shareholder ceases to have
any rights as a holder of the Glyko common shares in respect of which the       
shareholder has dissented other than the right to be paid the fair value of     
such shares as determined under the interim order and Section 190 of the Canada 
Business Corporations Act, unless:                                              

.   the dissenting shareholder withdraws the demand for payment before Glyko
makes a written offer to pay;                                       

.   Glyko fails to make a timely offer to pay to the dissenting shareholder 
      and the dissenting shareholder withdraws his or her demand for payment; or

 .   the directors of Glyko revoke the Glyko arrangement resolution and/or the
  Glyko continuance resolution, as applicable, in all of which cases the
    dissenting shareholder's rights as a shareholder are reinstated and such
shares shall be subject to the arrangement and/or the continuance if
either has been completed.                                          

In addition, pursuant to the Plan of Arrangement, Glyko registered        
shareholders who duly exercise such right of dissent and who:                   

.   are ultimately determined to be entitled to be paid fair value for their
Glyko common shares shall be deemed to have transferred their Glyko 
  common shares to Glyko immediately prior to the implementation time of
    the arrangement, to the extent the fair value therefor is paid by Glyko,
    and such Glyko common shares shall be cancelled as of the implementation
time of the arrangement, or                                         

.   are ultimately not entitled, for any reason, to be paid fair value for  
  their Glyko common shares, shall be deemed to have participated in the
arrangement on the same basis as any non-dissenting holder of       
     Glyko common shares and shall receive BioMarin common stock in accordance
with the Plan of Arrangement.                                       

Glyko is required, not later than seven days after the later of (i) the   
earlier of the effective date of the arrangement and the continuance and (ii)   
the date on which Glyko received the demand for payment of a                    

171 

DEFM14A
185th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 185th
dissenting shareholder, to send to each dissenting shareholder who has sent a   
demand for payment, an offer to pay for his or her Glyko common shares in an    
amount considered by the Glyko board of directors to be the fair value thereof, 
accompanied by a statement showing the manner in which the fair value was       
determined. Every offer to pay must be on the same terms. Glyko must pay for    
the Glyko common shares of a dissenting shareholder within 10 days after an     
offer to pay has been accepted by a dissenting shareholder, but any such offer  
lapses if Glyko does not receive an acceptance thereof within 30 days after the 
offer to pay has been made.                                                     

 If Glyko fails to make an offer to pay for a dissenting shareholder's Glyko
common shares, or if a dissenting shareholder fails to accept an offer which    
has been made, Glyko may, within 50 days after the effective date of the        
earlier of the arrangement and the continuance or within such further period as 
a court may allow, apply to a court to fix a fair value for the Glyko common    
shares of dissenting shareholders. If Glyko fails to apply to a court, a        
dissenting shareholder may apply to a court for the same purpose within a       
further period of 20 days or within such further period as a court may allow. A 
dissenting shareholder is not required to give security for costs in such an    
application. An application to the court by Glyko must be to the Superior Court 
of Justice (Ontario) and an application to the court by a dissenting            
shareholder must also be to the Superior Court of Justice (Ontario).            

Upon an application to a court, all dissenting shareholders whose Glyko   
common shares have not been purchased by Glyko will be joined as parties and    
bound by the decision of the court, and Glyko will be required to notify each   
affected dissenting shareholder of the date, place and consequences of the      
application and of his or her right to appear and be heard in person or by      
counsel. Upon any such application to a court, the court may determine whether  
any person is a dissenting shareholder who should be joined as a party, and the 
court will then fix a fair value for the Glyko common shares of all dissenting  
shareholders. The final order of a court will be rendered against Glyko in      
favor of each dissenting shareholder and for the amount of the fair value of    
his or her Glyko common shares as fixed by the court. The court may, in its     
discretion, allow a reasonable rate of interest on the amount payable to each   
dissenting shareholder from the effective date of the arrangement until the     
date of payment.                                                                

 The foregoing is only a summary of the dissenting shareholder provisions of
the interim order, Canada Business Corporations Act and the Plan of             
Arrangement, which are technical and complex. A complete copy of Section 190 of 
the Canada Business Corporations Act is attached to this Joint Proxy Circular   
as Annex H. It is recommended that any Glyko shareholder wishing to avail       
himself or herself of his or her dissent rights under those provisions seek     
legal advice as failure to comply strictly with the provisions of the interim   
order, Canada Business Corporations Act and the Plan of Arrangement may         
prejudice the right of dissent. For a general summary of certain income tax     
implications to a dissenting shareholder, see "Tax Considerations for           
Glyko Securityholders--Glyko Shareholders Resident in Canada--Dissenting Glyko  
Shareholders" and "Tax Considerations for Glyko Securityholders--Glyko          
Shareholders Not Resident in Canada--Dissenting Shareholders" and "Tax          
Considerations for Glyko Securityholders--U.S. Federal Income Tax               
Considerations for Glyko Shareholders--Dissenting U.S. Holders."                

172 

DEFM14A
186th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 186th
LEGAL MATTERS 

  Certain legal matters in connection with the arrangement will be passed upon
by Paul, Hastings, Janofsky & Walker LLP, Los Angeles, California, United       
States and Cassels Brock & Blackwell LLP, Toronto, Ontario, Canada on behalf of 
BioMarin and by Blake, Cassels & Graydon LLP, Toronto, Ontario, Canada and      
Testa, Hurwitz & Thibeault LLP, Boston, Massachusetts, United States on behalf  
of Glyko. As of the date hereof, none of the partners or associates of the      
foregoing law firms owned beneficially, directly or indirectly, in excess of    
one percent of the Glyko common shares or the BioMarin common stock.            

EXPERTS 

The BioMarin consolidated financial statements included in Annex I to this
Joint Proxy Circular and the IBEX Therapeutic Enzymes Division audited          
financial statements included in Annex L to this Joint Proxy Circular have been 
audited by Arthur Andersen LLP, independent certified public accountants, as    
indicated in their reports with respect thereto, and are included herein in     
reliance upon the authority of said firm as experts in giving said reports.     

The Glyko financial statements included in Annexes J and K to this Joint  
Proxy Circular have been audited by Arthur Andersen LLP, independent certified  
public accountants, as indicated in their reports with respect thereto, and are 
included herein in reliance upon the authority of said firm as experts in       
giving said reports.                                                            

Neither BioMarin nor Glyko has been able to obtain, after reasonable      
efforts, the reissued reports of Arthur Andersen LLP with respect to the        
financial statements included in this Joint Proxy Circular as Annexes I, J, K   
and L because, among other reasons, the partner and the audit manager in charge 
of auditing BioMarin and Glyko left Arthur Andersen and joined KPMG LLP         
effective May 9, 2002 and June 11, 2002, respectively. Therefore, in reliance   
on Rule 437a promulgated under the Securities Act, BioMarin and Glyko have      
dispensed with the requirement to file with this Joint Proxy Circular, the      
reissued reports of Arthur Andersen with respect to these financial statements. 
As a result, the BioMarin stockholders and the Glyko shareholders will not be   
able to recover against Arthur Andersen under Section 11 of the Securities Act  
for any untrue statement of a material fact contained in these financial        
statements or any omissions to state a material fact required to be stated      
therein. In addition, the ability of Arthur Andersen to satisfy any claims      
properly brought against it may be limited as a practical matter due to recent  
developments involving Arthur Andersen.                                         

WHERE YOU CAN FIND ADDITIONAL INFORMATION 

You should rely only on the information contained in this Joint Proxy     
Circular or to which BioMarin or Glyko has referred you in this Joint Proxy     
Circular. Neither BioMarin nor Glyko has authorized anyone to provide you with  
information that is different.                                                  

BioMarin and Glyko are subject to the informational requirements of the   
United States Securities Exchange Act of 1934. Accordingly, BioMarin files      
reports, proxy statements and other information with the Securities and         
Exchange Commission. Glyko files reports and other information with the         
Securities and Exchange Commission. Such reports, proxy statements and other    
information can be inspected and copied at the locations described above.       
Copies of these materials can be obtained from the public reference rooms of    
the Securities and Exchange Commission at the locations noted below, at         
prescribed rates. You can call the Securities and Exchange Commission at        
1-800-732-0330 for further information about the public reference room. The     
Securities and Exchange Commission maintains a web site that contains the       
registration statement, reports, proxy statements and other information         
regarding BioMarin at http://www.sec.gov. You may obtain further information    
with respect to BioMarin by reviewing this Joint Proxy Circular and the         
attached exhibits, which you may read and copy in the public reference room at  
the following location of the Securities and Exchange Commission:               

Public Reference Room 
Judiciary Plaza 
450 Fifth Street, N.W.  
Room 1024 
Washington, D.C. 20549  

173 

DEFM14A
187th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 187th
BioMarin stockholders should contact Morrow & Co., Inc., BioMarin's proxy 
solicitor at the address or telephone number listed below with any questions    
about the transaction.                                                          

Morrow & Co., Inc.  
445 Park Avenue--5th Floor  
New York, NY 10022  
1-800-607-0088  

Any BioMarin stockholder who needs additional copies of this Joint Proxy  
Circular or voting material should contact Morrow & Co., Inc. as described      
above.                                                                          

 Glyko also files reports, proxy statements and other information concerning
Glyko with securities regulatory authorities in Canada which are available on   
the System for Electronic Document Analyses and Retrieval of the Canadian       
Securities Administrators at http://www.sedar.com.                              

Glyko shareholders should contact:                                        

                                                                [Download Table]
                                                                             
   Shareholder Services Call Centre                                          
   Computershare Trust of Canada                                             

   Telephone:      (800) 663-9097 (toll free in the United States and Canada)
                   (514) 982-7270                                            

   Email:          caregistryinfo@computershare.com                          

with any questions related to the transaction or with any request for any       
documentation referred to herein.                                               

Reports, proxies and statements and other information concerning BioMarin 
also can be inspected at the offices of Nasdaq located at:                      

Nasdaq  
1735 K Street, N.W. 
Washington, D.C. 20006  

You should rely only on the information contained in this Joint Proxy     
Circular to vote your shares at the meetings. The companies have not authorized 
anyone to provide you with information that is different from what is contained 
in the Joint Proxy Circular. This Joint Proxy Circular is dated July 5, 2002.   
You should not assume that the information contained in the Joint Proxy         
Circular is accurate as of any date other than that date.                       

  The Joint Proxy Circular and the sending, communication and delivery thereof
to the holders of BioMarin common stock has been authorized and approved by the 
board of directors of BioMarin. The Joint Proxy Circular and the sending,       
communication and delivery thereof to the holders of Glyko common shares has    
been authorized and approved by the board of directors of Glyko.                

                                                                [Download Table]
                                                                            
By Order of the Board of Directors of  By Order of the Board of Directors of
  BioMarin Pharmaceutical Inc.           Glyko Biomedical Ltd.              

/s/  Christopher M. Starr              /s/  John A. Kolada                  
------------------------------------   ------------------------------------ 
Christopher M. Starr, Ph.D.            John A. Kolada                       
Secretary                              Secretary                            

July 5, 2002                           July 5, 2002                         

174 

DEFM14A
188th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 188th
NOTICE TO CANADIAN SHAREHOLDERS AND OPTIONHOLDERS OF GLYKO  

BioMarin is organized under the laws of the State of Delaware, United     
States. All of the directors and executive officers of BioMarin and many of the 
experts named in the Joint Proxy Circular are not residents of Canada. In       
addition, substantial portions of the assets of BioMarin and of such            
individuals and experts are located outside of Canada. As a result, it may be   
difficult or impossible for persons who become stockholders of BioMarin to      
effect service of process upon such persons within Canada with respect to       
matters arising under Canadian securities laws or to enforce against them in    
Canadian courts judgments predicated upon the civil liability provisions of     
Canadian securities laws. There is some doubt as to the enforceability in the   
United States in original actions, or in actions for enforcement of judgments   
of Canadian courts, of civil liabilities predicated upon Canadian securities    
laws. In addition, awards of punitive damages in actions brought in Canada or   
elsewhere may be unenforceable in the United States.                            

Disclosure in the Joint Proxy Circular relating to BioMarin has been      
prepared in accordance with U.S. securities laws. Shareholders should be aware  
that these requirements may differ from Canadian requirements. The financial    
statements of BioMarin included in the Joint Proxy Circular have not been       
prepared in accordance with Canadian generally accepted accounting principles   
and may not be comparable to financial statements of Canadian companies.        

175 

DEFM14A
189th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 189th
NOTICE TO UNITED STATES SHAREHOLDERS AND OPTIONHOLDERS OF GLYKO 

 This solicitation of proxies by Glyko is not subject to the requirements of
Section 14(a) of the United States Securities Exchange Act of 1934.             
Accordingly, the solicitation and transactions contemplated in the Joint Proxy  
Circular are made in the United States for securities of a Canadian foreign     
private issuer in accordance with Canadian corporate and securities laws, and   
the Joint Proxy Circular has been prepared in accordance with disclosure        
requirements applicable in Canada. Glyko shareholders in the United States      
should be aware that such requirements are different from those of the United   
States applicable to registration statements under the United States Securities 
Act of 1933 and proxy statements under the United States Securities Exchange    
Act of 1934.                                                                    

Except as set forth herein, the historical Glyko financial information    
included in the Joint Proxy Circular is presented in U.S. dollars and has been  
prepared in accordance with Canadian generally accepted accounting principles,  
which differ from United States generally accepted accounting principles in     
certain material respects, and thus may not be comparable to the unaudited pro  
forma consolidated condensed financial statements and the consolidated          
financial statements and historical consolidated financial information of       
BioMarin. Historical Glyko financial information prepared in accordance with    
United States generally accepted accounting principles is contained in Glyko's  
annual reports on Form 10-K and quarterly reports on Form 10-Q and may be       
obtained for review as described under "Where You Can Find Additional           
Information."                                                                   

  All of the directors and officers of Glyko, as well as certain experts named
herein, are resident outside the United States. As a result, it may be          
difficult for holders of Glyko common shares to effect service within the       
United States upon such directors, officers and experts who are not residents   
of the United States. There is some doubt as to the enforceability in Canada    
against Glyko or any of its directors, officers or experts who are not          
residents of the United States in original actions or in actions for            
enforcement of judgments of United States courts, of liabilities predicated     
solely upon United States federal securities laws.                              

176 

DEFM14A
190th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 190th
ANNEX A 

ACQUISITION AGREEMENT FOR A PLAN OF ARRANGEMENT 

BY AND AMONG  

BIOMARIN PHARMACEUTICAL INC., 

BIOMARIN ACQUISITION (NOVA SCOTIA) COMPANY, 

AND 

GLYKO BIOMEDICAL LTD. 

Dated as of February 6, 2002  

A-1 

DEFM14A
191st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 191st
TABLE OF CONTENTS 

                                                                [Download Table]

ARTICLE 1  THE PLAN OF ARRANGEMENT................................  A-6
                                                                       
   1.1   Implementation Steps by Glyko............................  A-6
   1.2   Implementation Steps by BioMarin and BioMarin Nova Scotia  A-6
   1.3   Interim Order............................................  A-6
   1.4   Effect of the Arrangement................................  A-6
   1.5   Effect on Capital Stock..................................  A-7
   1.6   Dissenting Shares........................................  A-7
   1.7   Surrender of Certificates................................  A-8
   1.8   No Further Ownership Rights in Glyko Common Shares.......  A-9
   1.9   Lost, Stolen or Destroyed Certificates...................  A-9
   1.10  Tax Consequences.........................................  A-9
   1.11  Closing..................................................  A-9

ARTICLE 2  REPRESENTATIONS AND WARRANTIES OF GLYKO................ A-10
   2.1   Organization, Standing and Power; Subsidiaries........... A-10
   2.2.  Articles of Incorporation and Bylaws..................... A-10
   2.3   Share Capital............................................ A-10
   2.4   Authority; Binding Nature of Agreement................... A-11
   2.5   No Conflict; Required Filings and Consents............... A-12
   2.6   Compliance; Permits...................................... A-13
   2.7   Canadian Securities Filings; Financial Statements........ A-13
   2.8   No Undisclosed Liabilities............................... A-14
   2.9   Absence of Certain Changes or Events..................... A-14
   2.10  Legal Proceedings; Orders................................ A-14
   2.11  Employee Benefit Plans................................... A-15
   2.12  Labor Matters............................................ A-15
   2.13  Restrictions on Business Activities...................... A-15
   2.14  Title to Property........................................ A-15
   2.15  Taxes.................................................... A-15
   2.16  Environmental Matters.................................... A-16
   2.17  Brokers.................................................. A-16
   2.18  Intellectual Property.................................... A-16
   2.19  Contracts................................................ A-16
   2.20  Insurance................................................ A-17
   2.21  Opinion of Financial Advisor............................. A-17
   2.22  Board Approval........................................... A-17
   2.23  Vote Required............................................ A-17
   2.24  Minute Books............................................. A-17
   2.25  Indemnification Obligations.............................. A-17
   2.26  Change of Control Payments............................... A-17
   2.27  Interested Party Transactions............................ A-17

ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF BIOMARIN AND BIOMARIN     
  NOVA SCOTIA..................................................... A-18
   3.1   Organization, Standing and Power......................... A-18
   3.2   Articles of Incorporation and Bylaws..................... A-18
   3.3   Share Capital............................................ A-18
   3.4   Subsidiaries............................................. A-19
   3.5   Ownership of Securities.................................. A-19
   3.6   No Conflict; Required Filings and Consents............... A-19
   3.7   Authority; Binding Nature of Agreement................... A-20

A-2 

DEFM14A
192nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 192nd
                                                                [Download Table]
                                                                               
   3.8   SEC Filings; Financial Statements................................ A-20
   3.9   No Undisclosed Liabilities....................................... A-20
   3.10  Valid Issuance................................................... A-21
   3.11  Listing.......................................................... A-21
   3.12  Legal Proceedings; Orders........................................ A-21
   3.13  Absence of Certain Changes and Events............................ A-21
   3.14  Environmental Matters............................................ A-21
   3.15  Compliance; Permits.............................................. A-21
   3.16  Taxes............................................................ A-22
   3.17  Contracts........................................................ A-23
   3.18  Vote Required.................................................... A-23
   3.19  Brokers.......................................................... A-23
   3.20  Intellectual Property............................................ A-23
   3.21  Opinion of Financial Advisor..................................... A-23
   3.22  Board Approval................................................... A-24

ARTICLE 4  CONDUCT PRIOR TO THE EFFECTIVE TIME............................ A-24
   4.1   Access and Investigation......................................... A-24
   4.2   Operation of Glyko's Business.................................... A-24

ARTICLE 5  GLYKO SHAREHOLDER APPROVAL AND BIOMARIN STOCKHOLDER                 
  APPROVAL................................................................ A-25
   5.1   Joint Proxy Circular; Board Recommendations; Other Filings....... A-25
   5.2   Meeting of Glyko Shareholders.................................... A-26
   5.3   Meeting of BioMarin Stockholders................................. A-28

ARTICLE 6  ADDITIONAL AGREEMENTS.......................................... A-28
   6.1   Confidentiality; Access to Information........................... A-28
   6.2   No Solicitation.................................................. A-28
   6.3   Public Disclosure................................................ A-29
   6.4   Reasonable Efforts............................................... A-29
   6.5   Notification..................................................... A-29
   6.6   Third Party Consents............................................. A-30
   6.7   Nasdaq and SWX Swiss Exchange Listing............................ A-30
   6.8   Glyko Affiliate Agreement........................................ A-30
   6.9   Listing of Glyko Common Shares................................... A-31
   6.10  Indemnification of Directors and Officers........................ A-31
   6.11  Stock Options.................................................... A-31
   6.12  Treatment as a Reorganization for U.S. Tax Purposes.............. A-32

ARTICLE 7  CONDITIONS TO THE ARRANGEMENT.................................. A-32
   7.1   Conditions to Obligations of Each Party to Effect the Arrangement A-32
   7.2   Additional Conditions to Obligations of Glyko.................... A-33
   7.3   Additional Conditions to the Obligations of BioMarin............. A-34

ARTICLE 8  TERMINATION, AMENDMENT AND WAIVER.............................. A-35
   8.1   Termination...................................................... A-35
   8.2   Notice of Termination; Effect of Termination..................... A-36
   8.3   Fees and Expenses................................................ A-36
   8.4   Amendment........................................................ A-37
   8.5   Extension; Waiver................................................ A-37

ARTICLE 9  GENERAL PROVISIONS............................................. A-37
   9.1   Non-Survival of Representations and Warranties................... A-37
   9.2   Notices.......................................................... A-37
   9.3   Interpretation................................................... A-39

A-3 

DEFM14A
193rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 193rd
                                                                [Download Table]
                                                         
   9.4   Counterparts............................... A-39
   9.5   Entire Agreement; Third Party Beneficiaries A-39
   9.6   Severability............................... A-39
   9.7   Governing Law.............................. A-39
   9.8   Rules of Construction...................... A-39
   9.9   Assignment................................. A-40
   9.10  WAIVER OF JURY TRIAL....................... A-40
   9.11  Currency................................... A-40
   9.12  Glyko Disclosure Letter.................... A-40
   9.13  BioMarin Disclosure Letter................. A-40
   9.14  Attorneys' Fees............................ A-40

ARTICLE 10  ADDITIONAL DEFINITIONS.................. A-40
   10.1  Additional Definitions..................... A-40

A-4 

DEFM14A
194th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 194th
ACQUISITION AGREEMENT FOR A PLAN OF ARRANGEMENT 

This ACQUISITION AGREEMENT FOR A PLAN OF ARRANGEMENT (this "Agreement") is
made and entered into as of February 6, 2002, among BIOMARIN PHARMACEUTICAL     
INC. ("BioMarin"), a corporation existing under the laws of Delaware, BIOMARIN  
ACQUISITION (NOVA SCOTIA) COMPANY, an unlimited liability company existing      
under the Companies Act (Nova Scotia) and a wholly owned Subsidiary of BioMarin 
("BioMarin Nova Scotia") and GLYKO BIOMEDICAL LTD., a corporation existing      
under the laws of Canada ("Glyko").                                             

RECITALS  

A.  Upon the terms and subject to the conditions of this Agreement and in 
accordance with the Canada Business Corporations Act (the "CBCA") and the       
Company Act (British Columbia) (the "BC Act"), BioMarin, BioMarin Nova Scotia   
and Glyko intend to enter into a business combination transaction by way of the 
Arrangement whereby:                                                            

(i) Glyko shall be continued (the "Continuance") under the laws of British
Columbia; and                                                     

 (ii) each outstanding Glyko Common Share that is not held by a holder who has
    exercised its Dissenters' Rights and is ultimately entitled to be paid
     the fair value of its Glyko Common Shares shall be exchanged for 0.3309
shares of BioMarin Common Stock.                                  

B.  The Board of Directors of Glyko has (i) received an opinion from TD   
Securities Inc. (the "Financial Advisor") dated the date hereof that the        
consideration to be received by Glyko shareholders under the Arrangement is     
fair to the shareholders of Glyko from a financial point of view; (ii)          
determined that the Arrangement is fair to Glyko shareholders and in the best   
interests of Glyko; (iii) unanimously approved this Agreement, the Arrangement  
and the other transactions contemplated by this Agreement; and (iv) determined  
to recommend that the shareholders of Glyko approve the Arrangement.            

  C.  The Board of Directors of each of BioMarin and BioMarin Nova Scotia have
unanimously approved this Agreement, the Arrangement and the other transactions 
contemplated by this Agreement and the Board of Directors of BioMarin has       
determined to recommend that holders of BioMarin Common Stock vote in favour of 
the Arrangement including, without limitation, the issuance of BioMarin Common  
Stock in connection with the Arrangement.                                       

D.  Concurrently with the execution of this Agreement, and as a condition 
and inducement to BioMarin's willingness to enter into this Agreement, certain  
shareholders of Glyko are entering into shareholder support agreements (the     
"Glyko Shareholder Support Agreements").                                        

E.  As a condition and inducement to BioMarin's willingness to enter into 
this Agreement, certain affiliates of Glyko will enter into Glyko affiliate     
agreements (the "Glyko Affiliate Agreements").                                  

F.  The parties intend, by executing this Agreement, to adopt a plan of   
reorganization within the meaning of Section 368 of the United States Internal  
Revenue Code of 1986, as amended (the "United States Code").                    

 G.  Capitalized terms used herein, if not otherwise defined, shall have the
meanings given to them in Article 10 below.                                     

NOW, THEREFORE, in consideration of the covenants, promises and           
representations set forth herein, and for other good and valuable               
consideration, the receipt and sufficiency of which are hereby acknowledged,    
the parties agree as follows:                                                   

A-5 

DEFM14A
195th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 195th
ARTICLE 1 

THE PLAN OF ARRANGEMENT 

1.1  Implementation Steps by Glyko.  Glyko covenants in favor of BioMarin 
and BioMarin Nova Scotia that Glyko shall:                                      

 (a)  as soon as reasonably practicable, apply in a manner acceptable to
     BioMarin under Section 192 of the CBCA for the Interim Order, and
      thereafter proceed with and diligently pursue the obtaining of the
Interim Order;                                              

 (b)  convene and hold the Glyko Shareholders Meeting for the purpose of
         considering the Continuance Resolution and the Arrangement Resolution
         (and for any other proper purpose as may be set out in the notice for
such meeting);                                              

   (c)  subject to obtaining such shareholder approval as is required by the
        CBCA and the Interim Order, diligently pursue the application to the
Court for the Final Order;                                  

  (d)  subject to obtaining the Final Order and the satisfaction or waiver
         of the other conditions herein contained in favor of Glyko, file with
        the Director Articles of Arrangement and such other documents as may
        be required in connection therewith under the CBCA to give effect to
the Arrangement; and                                        

   (e)  subject to obtaining such shareholder approval as is required by the
        CBCA, file with the Registrar Articles of Continuance and such other
      documents as may be required under the BC Act and the CBCA to give
effect to the Continuance.                                  

1.2  Implementation Steps by BioMarin and BioMarin Nova Scotia.  BioMarin 
and BioMarin Nova Scotia, as appropriate, jointly and severally covenant in     
favor of Glyko that BioMarin shall convene and hold the BioMarin Stockholders   
Meeting for the purpose of considering the approval of the Arrangement          
including, without limitation, the issuance of BioMarin Common Stock in         
connection with the Arrangement.                                                

  1.3  Interim Order.  The notice of motion for the application referred to in
Section 1.1(a) shall request that the Interim Order provide:                    

   (a)  for the class or classes of Persons to whom notice is to be provided
        in respect of the Arrangement and the Glyko Shareholders Meeting and
for the manner in which such notice is to be provided;      

(b)  that the requisite shareholder approval for the Arrangement      
Resolution shall be 66 2/3 percent of the votes cast on the 
       Arrangement Resolution by holders of Glyko Common Shares present in
Person or by proxy at the Glyko Shareholders Meeting;       

  (c)  that, in all other respects, the terms, restrictions and conditions
      of the bylaws and articles of Glyko, including quorum requirements
and all other matters, shall apply in respect of the Glyko  
Shareholders Meeting; and                                   

(d)  for the grant of the Dissenters' Rights.                         

1.4  Effect of the Arrangement.  At the Effective Time, the effect of the 
Arrangement shall be as provided in this Agreement and the Plan of Arrangement  
and the applicable provisions of the CBCA.                                      

A-6 

DEFM14A
196th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 196th
1.5  Effect on Capital Stock.  Subject to the terms and conditions of this
Agreement and the Plan of Arrangement, by virtue of the Arrangement, the        
following events or transactions shall occur:                                   

    (a) Exchange of Glyko Common Shares.  Each Glyko Common Share issued and
        outstanding immediately prior to the Implementation Time, other than
      any Dissenting Shares (as defined in and to the extent provided in
Section 1.6(a)), will be automatically exchanged (subject to
         Section 1.5(d)) such that the Glyko Common Shares will be transferred
         to BioMarin Nova Scotia in exchange for the delivery by BioMarin Nova
       Scotia of that portion of a share of BioMarin Common Stock equal to
         the Exchange Ratio. In no event will BioMarin Nova Scotia be required
      to transfer to holders of Glyko Common Shares more than 11,367,617
    shares of BioMarin Common Stock in connection with the rights of
         exchange provided for pursuant to this Agreement. If any Glyko Common
       Shares outstanding immediately prior to the Implementation Time are
         unvested or are subject to a repurchase option, risk of forfeiture or
   other condition under any applicable restricted shares purchase
     agreement or other agreement with Glyko, then the BioMarin Common
     Stock delivered to holders of Glyko Common Shares in exchange for
     such Glyko Common Shares will also be unvested and subject to the
      same repurchase option, risk of forfeiture or other condition, and
the certificates representing such BioMarin Common Stock may
        accordingly be marked with appropriate legends. Glyko shall take all
   action that may be necessary to ensure that, from and after the
         Implementation Time, BioMarin Nova Scotia is entitled to exercise any
such repurchase option or other right set forth in any such 
restricted shares purchase agreement or other agreement.    

(b) Stock Options.  Each Option to purchase Glyko Common Shares then
   outstanding under the Stock Option Plan shall be replaced by an
       Option to purchase BioMarin Common Stock in accordance with Section
6.11 hereof.                                                

    (c) Adjustments to Exchange Ratio.  The Exchange Ratio shall be adjusted
         to reflect appropriately the effect of any stock split, reverse stock
    split, stock dividend (including any dividend or distribution of
     securities convertible into BioMarin Common Stock or Glyko Common
Shares), extraordinary cash dividends, reorganization,      
       recapitalization, reclassification, combination, exchange of shares
       or other like change with respect to BioMarin Common Stock or Glyko
        Common Shares occurring on or after the date hereof and prior to the
Effective Time.                                             

   (d) Fractional Shares.  No fraction of a share of BioMarin Common Stock
         will be issued by virtue of the Arrangement, but in lieu thereof each
      holder of Glyko Common Shares who would otherwise be entitled to a
       fraction of a share of BioMarin Common Stock (after aggregating all
      fractional shares of BioMarin Common Stock that otherwise would be
   received by such holder) shall, upon surrender of such holder's
       Certificates(s) receive from BioMarin Nova Scotia an amount of cash
       (rounded to the nearest whole cent), without interest, equal to the
       product of (i) such fraction, and (ii) the average closing price of
      one share of BioMarin Common Stock for the twenty (20) most recent
   days that BioMarin Common Stock has traded ending on the second
       trading day immediately prior to the Effective Date, as reported on
the Nasdaq National Market ("Nasdaq").                      

1.6  Dissenting Shares.                                                   

    (a) Notwithstanding any provision of this Agreement to the contrary, the
    shares of any holder of Glyko Common Shares who has demanded and
    perfected appraisal and dissent rights ("Dissenters' Rights") in
      respect of such Glyko Common Shares in accordance with the Interim
 Order and the CBCA and who, as of the Effective Time, has not
   effectively withdrawn or lost such appraisal and dissent rights
     ("Dissenting Shares"), shall not be converted into or represent a
       right to receive BioMarin Common Stock pursuant to Section 1.5, but
   the holder thereof shall only be entitled to such rights as are
 granted by the Interim Order or the CBCA, as the case may be.

A-7 

DEFM14A
197th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 197th
  (b) Notwithstanding the provisions of subsection (a), if any holder of
      Glyko Common Shares who demands appraisal of such shares under the
        CBCA shall effectively withdraw (or otherwise by law not be entitled
      to) the right to appraisal, then, as of the later of the Effective
     Time and the occurrence of such event, such holder's shares shall
  automatically be exchanged for and represent only the right to
 receive BioMarin Common Stock, without interest thereon, upon
surrender of the certificate representing such shares.      

  (c) Glyko shall give BioMarin (i) prompt notice of any written demands
 for appraisal of any Glyko Common Shares, withdrawals of such
     demands, and any other instruments served pursuant to the Interim
     Order and the CBCA and received by Glyko which relate to any such
       demand for appraisal and (ii) the opportunity to participate in all
      substantial negotiations and proceedings which take place prior to
        the Effective Time with respect to demands for appraisal and dissent
  under the CBCA. Glyko shall not, except with the prior written
     consent of BioMarin (not to be unreasonably withheld or delayed),
voluntarily make any payment with respect to any demands for
     appraisal of Glyko Common Shares or offer to settle or settle any
such demands.                                               

(d) Any payments made to holders of Glyko Common Shares pursuant to 
 Section 1.6(a) shall be made solely from the assets of Glyko.

1.7  Surrender of Certificates.                                           

     (a) Depositary.  BioMarin shall select a bank or trust company reasonably
    acceptable to Glyko to act as the depositary (the "Depositary").

(b) BioMarin to Provide BioMarin Common Stock.  Promptly after the  
     Effective Time, BioMarin shall cause BioMarin Nova Scotia to make
     available to the Depositary, for exchange in accordance with this
         Article I, the BioMarin Common Stock issuable pursuant to Section 1.5
   in exchange for outstanding Glyko Common Shares, and cash in an
       amount sufficient for payment in lieu of fractional shares pursuant
to Section 1.5(d).                                          

    (c) Exchange Procedures.  Promptly after the Effective Time, each holder
         of record (as of the Effective Time) of a certificate or certificates
       (the "Certificates"), which immediately prior to the Effective Time
     represented outstanding Glyko Common Shares, shall be required to
    send to the Depositary (i) a duly completed and validly executed
     letter of transmittal in customary form (which shall specify that
 delivery shall be effected, and risk of loss and title to the
      Certificates shall pass, only upon delivery of the Certificates to
      the Depositary and shall contain such other provisions as BioMarin
      may reasonably specify) and (ii) instructions for use in effecting
  the surrender of the Certificates in exchange for certificates
representing BioMarin Common Stock, and cash in lieu of any 
   fractional shares pursuant to Section 1.5(d). Upon surrender of
    Certificates for cancellation to the Depositary or to such other
       agent or agents as may be appointed by BioMarin, together with such
 letter of transmittal, duly completed and validly executed in
 accordance with the instructions thereto, the holders of such
  Certificates shall be entitled to receive in exchange therefor
    certificates representing the number of whole shares of BioMarin
       Common Stock into which their Glyko Common Shares were exchanged at
   the Effective Time, together with payment in lieu of fractional
   shares which such holders have the right to receive pursuant to
       Section 1.5(d), and the Certificates so surrendered shall forthwith
        be cancelled. Until so surrendered, outstanding Certificates will be
         deemed from and after the Effective Time, for all corporate purposes,
         subject to Section 1.5(d), to evidence only the right to receive upon
         such surrender a certificate evidencing the number of whole shares of
 BioMarin Common Stock into which such Glyko Common Shares are
       entitled to be exchanged and the right to receive an amount in cash
       in lieu of the issuance of any fractional shares in accordance with
Section 1.5(d).                                             

A-8 

DEFM14A
198th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 198th
   (d) Required Withholding.  Each of the Depositary, BioMarin Nova Scotia
and Glyko shall be entitled to deduct and withhold from any 
   consideration payable or otherwise deliverable pursuant to this
        Agreement to any holder or former holder of Glyko Common Shares such
        amounts as may be required by law (as advised by outside tax counsel
       for BioMarin) to be deducted or withheld therefrom under the United
      States Code, the Income Tax Act (Canada) or under any provision of
         United States or Canadian federal, state, provincial, regional, local
       or foreign tax law or under any other applicable legal requirement.
       To the extent such amounts are so deducted or withheld and remitted
     to the appropriate taxing authority in accordance with applicable
  law, such amounts shall be treated for all purposes under this
    Agreement as having been paid to the Person to whom such amounts
      would otherwise have been paid, provided that such person shall be
         provided with a receipt evidencing remittance of such withheld amount
to the appropriate taxing authority.                        

(e) No Liability.  Notwithstanding anything to the contrary in this 
        Section 1.7, none of the Depositary, BioMarin, BioMarin Nova Scotia,
      Glyko or any party hereto shall be liable to a holder of shares of
        BioMarin Common Stock or Glyko Common Shares for any amount properly
  paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.                           

1.8  No Further Ownership Rights in Glyko Common Shares.  All shares of   
BioMarin Common Stock issued in accordance with the terms hereof (including any 
cash paid in respect thereof pursuant to Section 1.5(d)) shall be deemed to     
have been issued in full satisfaction of all rights pertaining to such Glyko    
Common Shares, and, following the Effective Time, there shall be no further     
registration of transfers on the records of Glyko of Glyko Common Shares which  
were outstanding immediately prior to the Effective Time. If, after the         
Effective Time, Certificates are presented to Glyko for any reason, they shall  
be cancelled and exchanged as provided in this Article 1.                       

1.9  Lost, Stolen or Destroyed Certificates.  In the event that any       
Certificates shall have been lost, stolen or destroyed, the Depositary shall    
issue in exchange for such lost, stolen or destroyed Certificates, upon the     
making of an affidavit of that fact by the holder thereof, certificates         
representing the BioMarin Common Stock into which the Glyko Common Shares       
represented by such Certificates were exchanged pursuant to Section 1.5, and    
cash for fractional shares, if any, as may be required pursuant to Section      
1.5(d); provided, however, that Glyko and BioMarin may, in their discretion and 
as a condition precedent to the issuance of such certificates representing      
BioMarin Common Stock and cash, require the owner of such lost, stolen or       
destroyed Certificates to deliver a bond in such sum as either of them may      
reasonably direct as indemnity against any claim that may be made against       
BioMarin or Glyko or the Depositary with respect to the Certificates alleged to 
have been lost, stolen or destroyed.                                            

1.10  Tax Consequences.  It is intended by the parties hereto that the    
Arrangement shall constitute a reorganization within the meaning of Section 368 
of the United States Code. The parties hereto adopt this Agreement as a "plan   
of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of  
the United States Treasury Regulations.                                         

1.11  Closing.  The closing of the Arrangement (the "Closing") (other than
obtaining the Final Order and the filing with the Director of the Articles of   
Arrangement) shall take place at the offices of Cassels Brock & Blackwell LLP,  
at a time and date to be specified by the parties, which shall be no later than 
the second business day after the satisfaction or waiver of the conditions set  
forth in Article 7, or at such other time, date and location as the parties     
hereto agree in writing (the "Closing Date").                                   

A-9 

DEFM14A
199th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 199th
ARTICLE 2 

REPRESENTATIONS AND WARRANTIES OF GLYKO 

As of the date hereof, Glyko represents and warrants to BioMarin and      
BioMarin Nova Scotia as follows, subject to such exceptions as are specifically 
disclosed in the disclosure letter prepared by Glyko and delivered to BioMarin, 
which disclosure letter shall provide an exception to or otherwise qualify the  
representations or warranties of Glyko specifically referred to in such         
disclosure letter (the "Glyko Disclosure Letter"), and acknowledges that        
BioMarin and BioMarin Nova Scotia are relying upon such representations and     
warranties in connection with the matters contemplated by this Agreement:       

2.1  Organization, Standing and Power; Subsidiaries.                      

   (a) Glyko does not have any Subsidiaries and Glyko does not own capital
       stock of, or any equity interest of any nature in, any other Entity
      other than BioMarin. Glyko is a corporation validly existing under
 the laws of the jurisdiction of its incorporation and has all
        necessary corporate power and authority: (i) to conduct its business
     in the manner in which its business is currently being conducted;
        (ii) to own and use its assets in the manner in which its assets are
        currently owned and used; and (iii) to perform its obligations under
all Contracts by which it is bound.                         

     (b) Glyko has not agreed to, is not obligated to make and is not bound by
        any Contract under which it may become obligated to make, any future
       investment in or capital contribution to any other Entity. Glyko is
        not a general partner of, and is not otherwise liable for any of the
   debts or other obligations of, any general partnership, limited
      partnership or other Entity. Glyko does not directly or indirectly
      own any equity or similar interest in or any interest convertible,
       exchangeable or exercisable for, any equity or similar interest in,
any Entity.                                                 

   (c) Glyko is in possession of all Approvals necessary to own, lease and
      operate the properties it purports to own, operate or lease and to
        carry on its business as it is now being conducted, except where the
    failure to have such Approvals would not, individually or in the
aggregate, have a Material Adverse Effect on Glyko.         

    (d) Glyko's sole undertaking is the holding of shares of BioMarin Common
         Stock. Glyko is qualified to do business as a foreign corporation and
is in good standing in the State California.                

 (e) Glyko: (i) is not subject to tax or filing requirements under the
        United States Code or any state tax legislation of the United States
         of America except in the State of California; (ii) is not required to
  make any filings under the United States Code or any state tax
       legislation, except in the State of California; (iii) does not have
    any employees in the United States of America; and (iv) does not
       otherwise carry on business in a manner which would make it subject
    to any requirements of United States laws except in the State of
     California insofar as any labor matters, ERISA matters or matters
   relating to the United States Code or state tax legislation are
concerned.                                                  

2.2  Articles of Incorporation and Bylaws.  Glyko has previously furnished
to BioMarin a complete and correct copy of its Articles of Incorporation and    
Bylaws as amended to date (together, the "Glyko Charter Documents"). Such Glyko 
Charter Documents are in full force and effect. Glyko is not in violation of    
any of the provisions of the Glyko Charter Documents.                           

2.3  Share Capital.                                                       

  (a) The authorized capital of Glyko consists of an unlimited number of
         Glyko Common Shares. At the close of business on February 5, 2002 (i)
      34,352,823 Glyko Common Shares were issued and outstanding, all of
    which are validly issued, fully paid and non-assessable and (ii)
81,397 Glyko                                                

A-10  

DEFM14A
200th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 200th
 Common Shares were reserved for issuance upon the exercise of
       outstanding options to purchase Glyko Common Shares under the Stock
    Option Plan. Except as disclosed in the Glyko Disclosure Letter,
       there is no Glyko Contract relating to any Glyko Stock Option or to
      the voting of, or restricting any Person from purchasing, selling,
         pledging or otherwise disposing of (or granting any Option or similar
      right with respect to), or granting any Options or other rights to
 acquire, any Glyko Common Shares. Glyko has made available to
        BioMarin an accurate and complete copy of the Stock Option Plan. All
   outstanding Glyko Stock Options have been issued and granted in
       compliance with all applicable securities laws and other applicable
Legal Requirements.                                         

     (b) Except as disclosed in the Glyko Disclosure Letter or as described in
        the immediately preceding paragraph, there are no options, warrants,
      conversion privileges or other rights, agreements, arrangements or
       commitments (pre-emptive, contingent or otherwise) obligating Glyko
to issue or sell Glyko Common Shares or other securities or 
securities or obligations of any kind convertible into or   
      exchangeable for directly or indirectly any Glyko Common Shares or
     other securities, nor is there outstanding any stock appreciation
         rights, phantom equity or similar rights, agreements, arrangements or
        commitments based upon the book value, income or any other attribute
 of Glyko. There are no outstanding bonds, debentures or other
        evidences of indebtedness of Glyko having the right to vote (or that
       are convertible for or exercisable into securities having the right
       to vote) with the holders of the Glyko Common Shares on any matter.
There are no outstanding contractual obligations of Glyko to
  repurchase, redeem or otherwise acquire any of its outstanding
        securities. No holder of securities issued by Glyko has any right to
     compel Glyko to register or otherwise qualify such securities for
public sale in Canada or the United States.                 

(c) Glyko owns free and clear of all Encumbrances (except for any   
       restrictions on resale under applicable securities laws) 11,367,617
  shares of BioMarin Common Stock with good and marketable title
  thereto. There are no subscriptions, options, calls, warrants,
         similar ownership interests, rights, commitments or agreements of any
        character (whether or not currently exercisable) to which Glyko is a
         party or by which it is bound obligating Glyko to deliver or sell, or
         cause to be delivered or sold, any shares of BioMarin Common Stock or
obligating Glyko to grant, extend, or enter into any such   
        subscription, options, warrant, call, right, commitment or agreement
       and to Glyko's Knowledge there is no condition or circumstance that
       may give rise to or provide a basis for the assertion of a claim by
       any Person to the effect that such Person is entitled to acquire or
       receive any shares of BioMarin Common Stock held by Glyko. There is
        no voting trust, proxy, or other agreement or understanding to which
         Glyko is a party or by which it is bound with respect to any share of
BioMarin Common Stock.                                      

   (d) Glyko has received a report dated January 21, 2002 from Independent
 Investor Communications Corporation (a copy of which has been
      provided to BioMarin ) disclosing that Persons who are resident in
     the Province of Ontario do not beneficially own more than two (2)
         percent of the outstanding Glyko Common Shares. To Glyko's Knowledge,
        there are no Persons who are resident in the Province of Ontario who
     beneficially own Glyko Common Shares which are held by registered
        holders or nominees who are not resident in the Province of Ontario.

2.4  Authority; Binding Nature of Agreement.  Glyko has the requisite     
corporate power and authority to execute and deliver this Agreement and to      
perform its obligations hereunder and, subject to obtaining the Required Glyko  
Shareholder Vote and the approval of the Court to the Arrangement, to           
consummate the transactions contemplated hereby. The execution and delivery of  
this Agreement by Glyko and the consummation by Glyko of the transactions       
contemplated hereby have been duly and validly authorized by all necessary      
corporate action on the part of Glyko and no other corporate proceedings on the 
part of Glyko are necessary to authorize this Agreement or to consummate the    
transactions contemplated hereby (other than all proceedings related to the     
approval and adoption of this Agreement and the Continuance and the Arrangement 
by the Required Glyko Shareholder Vote and Court approval of the Arrangement).  
This Agreement has been duly                                                    

A-11  

DEFM14A
201st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 201st
and validly executed and delivered by Glyko and, assuming the due               
authorization, execution and delivery by BioMarin and BioMarin Nova Scotia,     
constitutes a legal and binding obligation of Glyko, enforceable against Glyko  
in accordance with its terms subject to (i) laws of general application         
relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of 
law governing specific performance, injunctive relief and other equitable       
remedies.                                                                       

2.5  No Conflict; Required Filings and Consents.                          

    (a) Neither (1) the execution, delivery or performance of this Agreement
         or any of the other agreements referred to in this Agreement to which
         Glyko will be a party, nor (2) the consummation of the Arrangement or
      any of the other transactions contemplated by this Agreement, will
(with or without notice or lapse of time):                  

        (i)  contravene, conflict with or result in a violation of (A) any
            of the provisions of the Glyko Charter Documents, or (B) any
              resolution adopted by the shareholders, the Board of Directors
    or any committee of the Board of Directors of Glyko;

    (ii) contravene, conflict with or result in a violation of any
            applicable Legal Requirement or any order, writ, injunction,
             judgment or decree to which Glyko, or any of the assets owned
or used by Glyko is subject;                    

(iii) other than as contemplated under this Agreement or the
           Arrangement (including, without limitation, the exercise of
             Dissenters' Rights), contravene, conflict with or result in a
         violation or breach of, or result in a default under, any
             provision of any Glyko Contract, or give any Person the right
              to (A) declare a default or exercise any remedy under any such
             Glyko Contract, (B) accelerate the maturity or performance of
               any such Glyko Contract, or (C) cancel, terminate or modify any
term of such Glyko Contract;                    

          (iv) result in the imposition or creation of any Encumbrance upon or
 with respect to any asset owned or used by Glyko;

   (v)  give rise to any right of termination or acceleration of
             indebtedness, or cause any third party indebtedness to become
               due before its stated maturity or cause any available credit to
cease to be available; or                       

   (vi) result in any payment (including severance, unemployment
            compensation, golden parachute, bonus or otherwise) becoming
        due to any director or employee of Glyko other than as a
               shareholder of Glyko or holder of Glyko Stock Options under the
terms of the Arrangement.                       

   (b) The execution and delivery of this Agreement by Glyko does not, and
     the performance of this Agreement by Glyko shall not, require any
Consent or any filing with or notification to, any court or 
      Governmental Body except: (i) approval by the Court of the Plan of
Arrangement; (ii) the Appropriate Regulatory Approvals; and 
     (iii) such other filings, registrations, permits, authorizations,
         consents or approvals that if not obtained, made or given, could not,
      individually or in the aggregate, reasonably be expected to have a
    Material Adverse Effect on Glyko, or prevent consummation of the
transactions or otherwise prevent Glyko from performing its 
obligations under this Agreement.                           

    (c) Glyko (i) does not hold $15 million or more of assets, excluding the
      shares of BioMarin Common Stock held by Glyko and other investment
       assets, located in the United States and (ii) did not make sales in
or into the United States of $25 million or more in its last
completed fiscal year.                                      

A-12  

DEFM14A
202nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 202nd
2.6  Compliance; Permits.                                                 

     (a) Except as could not reasonably be expected to have a Material Adverse
    Effect on Glyko, Glyko is not in conflict with, or in default or
         violation of, (i) any Legal Requirement or Government or Governmental
    Authorization applicable to Glyko or by which its properties are
       bound or affected, or (ii) any Contract, Governmental Authorization
     or other instrument or obligation to which Glyko is a party or by
   which Glyko or its properties are bound or affected. To Glyko's
     Knowledge, no investigation or review by any Governmental Body is
       pending or, threatened against Glyko, nor has any Governmental Body
       indicated to Glyko an intention to conduct the same. Since June 30,
       2000, Glyko has not received any notice or other communication from
 any Governmental Body or other Person regarding any actual or
possible violation of, or failure to comply with, any Legal 
    Requirement except as could not reasonably be expected to have a
Material Adverse Effect on Glyko.                           

     (b) Glyko holds all Governmental Authorizations necessary to enable Glyko
     to conduct its businesses in the manner in which such business is
    currently being conducted, except where the failure to hold such
       Governmental Authorizations has not had and would not reasonably be
 expected to have a Material Adverse Effect on Glyko. All such
       Governmental Authorizations are valid and in full force and effect.
         Glyko is, and since June 30, 2000 has been, in substantial compliance
        with the terms and requirements of such Governmental Authorizations,
   except where the failure to be in compliance with the terms and
    requirements of such Governmental Authorizations has not had and
         could not reasonably be expected to have a Material Adverse Effect on
    Glyko. Since June 30, 2000, Glyko has not received any notice or
    other communication from any Governmental Body regarding (i) any
         actual or possible violation of or failure to comply with any term or
       requirement of any material Governmental Authorization, or (ii) any
        actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any material Governmental    
Authorization.                                              

2.7  Canadian Securities Filings; Financial Statements.                   

 (a) Glyko has made available to BioMarin (including through the SEDAR
     System of the Canadian securities administrators) an accurate and
      complete copy of each Glyko Regulatory Report filed by Glyko since
     December 31, 1998, which include all the Glyko Regulatory Reports
       required to be filed by Glyko since June 30, 2000 and, prior to the
         Effective Time, Glyko will have made available to BioMarin (including
       through the SEDAR System of the Canadian securities administrators)
        with accurate and complete copies of any additional Glyko Regulatory
       Reports filed hereafter by Glyko prior to the Effective Time. Since
     September 30, 2001, Glyko has not filed any confidential material
       change report under any Canadian Securities Legislation or with any
       stock exchange or other self-regulatory authority which at the date
         hereof remains confidential. The Glyko Regulatory Reports filed since
        June 30, 2000 (including the financial statements contained therein)
       (i) were prepared in accordance with the then existing requirements
         of Canadian Securities Legislation, the TSE and the CBCA, as the case
        may be; and (ii) did not at the time they were filed (and if amended
         or superseded by a filing prior to the date of this Agreement then on
       the date of such filing) contain any untrue statement of a material
       fact or omit to state a material fact required to be stated therein
         or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.   

(b) Each set of financial statements (including, in each case, any  
    related notes thereto) contained in Glyko Regulatory Reports and
     Glyko's audited financial statements as at and for the year ended
      December 31, 2000 and Glyko's unaudited financial statements as at
   and for the period ended September 30, 2001 (the "Glyko Interim
     Financial Statements") comply as to form in all material respects
  with the published rules and regulations of the OSC applicable
thereto and were                                            

A-13  

DEFM14A
203rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 203rd
     prepared in accordance with Canadian GAAP applied on a consistent
  basis throughout the periods involved (subject, in the case of
  unaudited interim financial statements, to the absence of note
     disclosure and year-end adjustments) and each fairly presents the
       financial position of Glyko at the dates thereof and the results of
its operations and cash flows for the periods indicated.    

   (c) Glyko is a "reporting issuer" or its equivalent for the purposes of
 Canadian Securities Legislation in Ontario, British Columbia,
         Alberta, Manitoba, Saskatchewan, Nova Scotia and New Brunswick and is
 not in violation of any requirement under Canadian Securities
Legislation.                                                

2.8  No Undisclosed Liabilities.  Glyko does not have any liabilities     
(absolute, accrued, contingent or otherwise) of a nature required to be         
disclosed on a balance sheet or in the related notes to the financial           
statements prepared in accordance with Canadian GAAP except: (a) liabilities    
provided for in the Glyko Interim Financial Statements; (b) normal and          
recurring current liabilities incurred since the date of the Glyko Interim      
Financial Statements in the ordinary course of business and consistent with     
past practices; (c) liabilities incurred in connection with the Arrangement; or 
(d) as could not reasonably be expected to have a Material Adverse Effect on    
Glyko.                                                                          

2.9  Absence of Certain Changes or Events.  Since December 31, 2000:      

 (a) there has not been any Material Adverse Effect relating to Glyko;

   (b) Glyko has not (i) declared, accrued, set aside or paid any dividend
      or made any other distribution in respect of any shares of capital
   stock or (ii) repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities;                

     (c) Glyko has not sold, issued or granted, or authorized the issuance of:
    (i) any capital stock or other security (except for Glyko Common
    Shares issued upon the valid exercise of outstanding Glyko Stock
        Options in accordance with the terms of the Stock Option Plan); (ii)
    any Option, warrant or right to acquire any capital stock or any
other security except for Glyko Stock Options; or (iii) any 
        instrument convertible into or exchangeable for any capital stock or
other security;                                             

     (d) there has been no amendment to the Glyko Charter Documents, and Glyko
  has not effected or been a party to any merger, consolidation,
         amalgamation, share exchange, business combination, recapitalization,
       reclassification of shares, stock split, division or subdivision of
   shares, reverse stock split, consolidation of shares or similar
transaction;                                                

(e) Glyko has not received any Acquisition Proposal other than the  
Acquisition Proposal set forth herein; and                  

(f) Glyko has conducted its business only in the ordinary course of 
         business consistent with past practice (except in connection with the
transactions contemplated by this Agreement).               

2.10  Legal Proceedings; Orders.                                          

 (a) There is no pending Legal Proceeding, and to Glyko's Knowledge no
   Person has threatened to commence any Legal Proceeding (i) that
         involves Glyko or any of the assets owned or used by Glyko, except as
        disclosed in the Glyko Disclosure Letter or (ii) that challenges, or
       that may have the effect of preventing, delaying, making illegal or
   otherwise interfering with, the Arrangement or any of the other
         transactions contemplated by this Agreement. To Glyko's Knowledge, no
   event has occurred, and no claim, dispute or other condition or
        circumstance exists, that could reasonably be expected to, give rise
 to or serve as a basis for the commencement of any such Legal
Proceeding.                                                 

   (b) There is no material order, writ, injunction, judgment or decree to
         which Glyko, or any of the assets owned or used by Glyko, is subject.
To Glyko's Knowledge, no officer or director of Glyko       

A-14  

DEFM14A
204th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 204th
      is subject to any order, writ, injunction, judgment or decree that
         prohibits such officer or director from engaging in or continuing any
    conduct, activity or practice relating to the business of Glyko.

2.11  Employee Benefit Plans.  Other than the Stock Option Plan, Glyko has
no employee benefit, health, welfare, supplemental employment benefit, bonus,   
pension, profit sharing, deferred compensation, stock compensation, stock       
purchase, retirement, hospitalization insurance, medical, dental, legal,        
disability and similar plans or arrangements or practices applicable to any of  
Glyko's current or former employees, officers, directors or consultants.        

2.12  Labor Matters.  There are no material controversies, complaints,    
claims, labor disputes or grievances pending or, to Glyko's Knowledge,          
threatened, between Glyko and any of its current or former employees, officers, 
directors or consultants. Glyko is not a party to any collective bargaining     
agreement or other labor union contract or employee association applicable to   
Persons employed by Glyko. Glyko is in material compliance with all applicable  
Legal Requirements relating to employment, employment practices, terms and      
conditions of employment and wages.                                             

2.13  Restrictions on Business Activities.  There is no agreement,        
commitment, judgment, injunction, order or decree binding upon Glyko or to      
which Glyko is a party which has or could reasonably be expected to have the    
effect of prohibiting or materially impairing any business practice of Glyko,   
any acquisition of property by Glyko or the conduct of business by Glyko as     
currently conducted.                                                            

 2.14  Title to Property.  Glyko owns, and has good and marketable title to,
all assets reflected on the Glyko Interim Financial Statements. All of said     
assets are owned by Glyko free and clear of any Encumbrances, except for (a)    
any lien for current taxes not yet due and payable and (b) in respect of assets 
other than shares of BioMarin Common Stock, minor liens that have arisen in the 
ordinary course of business. Glyko is not a party to or otherwise bound by any  
lease pursuant to which Glyko leases from others material real or personal      
property.                                                                       

2.15  Taxes.                                                              

   (a) Glyko has timely filed all Returns relating to Taxes required to be
         filed by Glyko with any Governmental Body, and such Returns have been
completed in accordance with Legal Requirements.            

     (b) As of the Effective Time, except as disclosed in the Glyko Disclosure
        Letter, Glyko (i) will have paid within the time required by law, or
     accrued all Taxes it is required by law to pay or accrue and (ii)
    will have withheld from each payment made to its past or present
employees, officers, directors and independent contractors, 
      creditors, shareholders or other third parties all Taxes and other
       material deductions required by law to be withheld and have, within
      the time required by law, paid such withheld amounts to the proper
Governmental Bodies.                                        

 (c) Except as disclosed in the Glyko Disclosure Letter, Glyko has not
  been delinquent in the payment of any Tax nor is there any Tax
 deficiency outstanding, nor to Glyko's Knowledge, proposed or
    assessed against Glyko, nor has Glyko executed any waiver of any
 statute of limitations on or extensions of the period for the
         assessment or collection of any Tax. There are no matters relating to
   Taxes under discussion between any Governmental Body and Glyko.

    (d) To Glyko's Knowledge, no audit or other examination of any Return of
      Glyko is currently in progress, nor has Glyko been notified of any
     request for such an audit or other examination, nor is any taxing
         authority asserting, or threatening to assert against Glyko any claim
for Taxes.                                                  

     (e) There are no Encumbrances of any sort on the assets of Glyko relating
      to or attributable to Taxes except for liens for Taxes not yet due
and payable.                                                

A-15  

DEFM14A
205th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 205th
    (f) Glyko is not a party to a tax sharing or allocation agreement and is
         not liable for the Taxes of any other Person, whether as a transferee
    or successor or by contract or otherwise, nor does Glyko owe any
amount under any such agreement.                            

(g) Except as disclosed in the Glyko Disclosure Letter, to Glyko's  
       Knowledge, no adjustment relating to any Returns filed by Glyko has
       been proposed in writing, formally or informally, by any Government
Body to Glyko or any Representative.                        

    (h) Glyko does not have any liability for any unpaid Taxes which has not
 been accrued for or reserved on the Glyko balance sheet dated
         September 30, 2001 in accordance with Canadian GAAP, whether asserted
        or unasserted, contingent or otherwise, other than any liability for
        unpaid Taxes that may have accrued since September 30, 2001 and that
are not yet payable.                                        

     (i) Since June 30, 2000, to Glyko's Knowledge, Glyko has not deducted any
   amounts in computing its income in a taxation year which may be
         included in a subsequent taxation year under Section 78 of the Income
Tax Act (Canada).                                           

 (j) Since June 30, 2000, to Glyko's Knowledge, Glyko has not made any
material Tax election.                                      

2.16  Environmental Matters.  All operations of Glyko are being conducted 
and, to Glyko's Knowledge have been conducted, in material compliance with all  
Environmental Laws. Glyko is not subject to:                                    

(a) any governmental or regulatory remedial or control action,      
proceeding, application, order or directive which relates to
   environmental, health or safety matters or any investigation or
     evaluation concerning environmental, health or safety matters; or

    (b) (i) any demand or notice with respect to the breach of, or liability
      under, any Environmental Laws and (ii) to Glyko's Knowledge, there
      are no facts or circumstances that could reasonably be expected to
         result in any such action, proceeding, application, order, directive,
    demand, or notice to which it would be subject which in any case
     could reasonably be expected to have a Material Adverse Effect on
Glyko.                                                      

2.17  Brokers.  Except for TD Securities Inc., no broker, finder or       
investment banker is entitled to any brokerage, finder's or other fee or        
commission in connection with the Arrangement or any of the other transactions  
contemplated by this Agreement based upon arrangements made by or on behalf of  
Glyko. Glyko has furnished to BioMarin accurate and complete copies of all      
agreements under which any such fees, commissions or other amounts have been    
paid or may become payable and all indemnification and other agreements related 
to the engagement of TD Securities Inc.                                         

 2.18  Intellectual Property.  Glyko does not own and is not licensed to use
any Intellectual Property. There is no Intellectual Property that is required   
to be used by Glyko in carrying on its business as presently conducted.         

2.19  Contracts.                                                          

    (a) Other than this Agreement, in connection with the Arrangement, or as
        disclosed in the Glyko Disclosure Letter, there is no Glyko Contract
that constitutes a Material Contract.                       

(b) (i) Glyko has not violated or breached, or committed any default
  under, any Glyko Contract, except for violations, breaches and
      defaults that have not had and would not reasonably be expected to
       have a Material Adverse Effect on Glyko; and, to Glyko's Knowledge,
      no other Person has violated or breached, or committed any default
 under, any Glyko Contract, except for violations, breaches or
      defaults that have not had and would not reasonably be expected to
   have a Material Adverse Effect on Glyko; and (ii) other than in
respect of the exercise of Dissenters'                      

A-16  

DEFM14A
206th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 206th
Rights, to Glyko's Knowledge, no event has occurred, and no 
     circumstance or condition exists, that (with or without notice or
       lapse of time) will, or could reasonably be expected to, (A) result
  in a violation or breach of any of the provisions of any Glyko
   Contract, (B) give any Person the right to declare a default or
         exercise any remedy under any Glyko Contract, (C) give any Person the
right to accelerate the maturity or performance of any Glyko
      Contract, or (D) give any Person the right to cancel, terminate or
     modify any Glyko Contract, except in each such case for defaults,
      acceleration rights, termination rights and other rights that have
   not had and would not reasonably be expected to have a Material
Adverse Effect on Glyko.                                    

2.20  Insurance.  Other than directors' and officers' insurance issued by 
American Home Assurance Company, Glyko has no material insurance policies or    
material self insurance programs and arrangements relating to the business,     
assets and operations of Glyko. Such insurance policy is in full force and      
effect. Since December 31, 2000, Glyko has not received any written notice      
regarding any actual: (a) cancellation or invalidation of any insurance policy; 
(b) refusal of any coverage or rejection of any material claim under any        
insurance policy; or (c) except as disclosed in the Glyko Disclosure Letter,    
material adjustment in the amount of the premiums payable with respect to any   
insurance policy.                                                               

2.21  Opinion of Financial Advisor.  The Board of Directors of Glyko has  
received the opinion of TD Securities Inc., financial advisor to Glyko, dated   
the date of this Agreement, to the effect that, as of such date, the            
consideration to be received by shareholders of Glyko under the Arrangement is  
fair to the shareholders of Glyko from a financial point of view (the "Glyko    
Opinion"). Glyko will furnish an accurate and complete copy of said opinion to  
BioMarin for informational purposes only after receipt thereof by Glyko.        

2.22  Board Approval.  The Board of Directors of Glyko (at a meeting duly 
called and held) has (a) determined (pursuant to a unanimous vote of all        
members of the Board of Directors of Glyko entitled to vote thereon) that the   
Arrangement and the other transactions contemplated by this Agreement are fair  
to shareholders of Glyko and in the best interests of Glyko and (b) determined  
as of the date hereof to recommend that the holders of Glyko Common Shares vote 
in favor of the Arrangement.                                                    

2.23  Vote Required.  Subject to the terms of the Interim Order, the      
Required Glyko Shareholder Vote is the only vote of the holders of any class or 
series of shares of Glyko necessary to approve the Arrangement and the          
transactions contemplated thereby.                                              

  2.24  Minute Books.  The minute books of Glyko made available to counsel for
BioMarin are the complete minute books of Glyko and, to Glyko's Knowledge,      
contain the accurate text of all resolutions passed by Glyko's Board of         
Directors (or committees thereof) and shareholders either at meetings or by     
written consent.                                                                

2.25  Indemnification Obligations.  There are no actions, proceedings or  
other events pending or, to Glyko's Knowledge, threatened against any officer,  
director or agent or former officer, director, employee or agent of Glyko which 
would give rise to any indemnification obligation of Glyko to its current or    
former officers, directors, employees or agents under the Glyko Charter         
Documents or any agreement between Glyko and any of its current or former       
officers, directors, employees or agents.                                       

2.26  Change of Control Payments.  Other than as a result of the          
acceleration of vesting of Glyko Stock Options in accordance with their terms,  
there are no amounts that may become payable in cash or otherwise (whether      
currently or in the future) to current or former consultants, officers,         
directors or employees of Glyko as a result of or in connection with the        
Arrangement.                                                                    

2.27  Interested Party Transactions.  Except in connection with the       
transactions contemplated by this Agreement and the Arrangement, no officer or  
director of Glyko (nor any ancestor, sibling, descendant or spouse of any of    
such Person, or any trust, partnership or corporation in which any such Person  
has an economic interest), has, directly or indirectly, a beneficial interest   
in any Glyko Contract. Except as disclosed in the Glyko                         

A-17  

DEFM14A
207th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 207th
Disclosure Letter, there are no receivables of Glyko owing by any past or       
present director, officer, employee of, consultant to Glyko (or any ancestor,   
sibling, descendant or spouse of any such Persons, or any trust, partnership or 
corporation in which any of such Persons has an economic interest), other than  
advances in the ordinary and usual course of business for reimbursable business 
expenses (as determined in accordance with Glyko's established employee         
reimbursement policies and consistent with past practice). None of Glyko's      
shareholders has agreed to, or assumed, any obligation or duty to guaranty or   
otherwise assume or incur any obligation or liability of Glyko.                 

ARTICLE 3 

REPRESENTATIONS AND WARRANTIES OF BIOMARIN AND  
BIOMARIN NOVA SCOTIA  

As of the date hereof, BioMarin and BioMarin Nova Scotia jointly and      
severally represent and warrant to Glyko as follows, subject to such exceptions 
as are specifically disclosed in the disclosure letter prepared by BioMarin and 
delivered to Glyko, which disclosure letter shall provide an exception to or    
otherwise qualify the representations or warranties of BioMarin specifically    
referred to in such disclosure letter (the "BioMarin Disclosure Letter"), and   
acknowledges that Glyko is relying upon such representations and warranties in  
connection with the matters contemplated by this Agreement:                     

3.1  Organization, Standing and Power.                                    

  (a) Each of BioMarin and BioMarin Nova Scotia is a corporation validly
        existing under the laws of its jurisdiction of incorporation and has
   all necessary corporate power and authority: (i) to conduct its
   business in the manner in which its business is currently being
        conducted; (ii) to own and use its assets in the manner in which its
 assets are currently owned and used; and (iii) to perform its
obligations under all Contracts by which it is bound.       

 (b) Each of BioMarin and BioMarin Nova Scotia is in possession of all
   Approvals necessary to own, lease and operate the properties it
        purports to own, operate or lease and to carry on its business as it
 is now being conducted, except where the failure to have such
 Approvals would not, individually or in the aggregate, have a
       Material Adverse Effect on either BioMarin or BioMarin Nova Scotia.

 (c) Each of BioMarin and BioMarin Nova Scotia is duly qualified to do
         business as a foreign corporation, and is in good standing, under the
       laws of all jurisdictions where the nature of its business requires
     such qualification and where the failure to be so qualified would
have a Material Adverse Effect on BioMarin.                 

  (d) BioMarin Nova Scotia was formed on February 6, 2002 solely for the
    purpose of engaging in the transactions contemplated hereby, has
 engaged in no other business activities and has conducted its
operations only as contemplated hereby.                     

3.2  Articles of Incorporation and Bylaws.  BioMarin has previously       
furnished to Glyko a complete and correct copy of its Articles of Incorporation 
and Bylaws as amended to date (together, the "BioMarin Charter Documents").     
Such BioMarin Charter Documents are in full force and effect. BioMarin is not   
in violation of any of the provisions of the BioMarin Charter Documents.        

3.3  Share Capital.  The authorized capital of BioMarin consists of (i)   
1,000,000 shares of preferred stock, par value $0.001 per share; and (ii)       
75,000,000 shares of BioMarin Common Stock. At the close of business on         
February 5, 2002 (i) 7,765,076 shares of BioMarin Common Stock were reserved    
for issuance upon the exercise of outstanding options to purchase BioMarin      
Common Stock under all stock option or other incentive plans; and               

A-18  

DEFM14A
208th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 208th
(ii) 52,432,167 shares of BioMarin Common Stock were issued and outstanding,    
all of which are validly issued, fully paid and non-assessable and no shares of 
preferred stock were issued and outstanding. As of the date of this Agreement,  
the number of shares of BioMarin Common Stock which have been reserved for      
issuance in connection with options, warrants, conversion privileges or other   
rights, agreements, arrangements or other commitments obligating BioMarin to    
issue or sell any shares of BioMarin Common Stock or securities or obligations  
convertible into or exchangeable for any shares of BioMarin Common Stock is as  
set forth in the BioMarin Disclosure Letter.                                    

3.4  Subsidiaries.  Each Subsidiary of BioMarin is a corporation, limited 
liability company or unlimited liability company duly incorporated or           
organized, and validly existing under the laws of its jurisdiction of           
incorporation or organization and has all necessary corporate, limited          
liability company or unlimited liability company, as the case may be, power and 
authority: (a) to conduct its business in the manner in which its business is   
currently being conducted; (b) to own and use its assets in the manner in which 
its assets are currently owned and used; and (c) to perform its obligations     
under all Contracts by which it is bound. Each Subsidiary of BioMarin is duly   
qualified to do business as a foreign corporation, unlimited liability company  
or limited liability company under the laws of all jurisdictions where the      
nature of its business requires such qualification and where the failure to be  
so qualified would have a Material Adverse Effect on BioMarin.                  

3.5  Ownership of Securities.  Other than as disclosed in the BioMarin    
Disclosure Letter, BioMarin is the beneficial owner of all of the issued and    
outstanding shares or other interests of each of its Subsidiaries with good and 
marketable title thereto, free and clear of all Encumbrances (except for any    
restrictions on resale under applicable securities laws).                       

3.6  No Conflict; Required Filings and Consents.                          

  (a) Neither (1) the execution and delivery of this Agreement or any of
      the other agreements referred to in this Agreement by BioMarin and
 BioMarin Nova Scotia nor (2) the consummation by BioMarin and
      BioMarin Nova Scotia of the Arrangement or any of the transactions
        contemplated hereby or thereby will (with or without notice or lapse
of time):                                                   

         (i)  contravene, conflict with or result in any breach or violation
             of (A) any provision of the BioMarin Charter Documents or the
              certificate of incorporation or bylaws of BioMarin Nova Scotia
               or (B) any resolution adopted by the shareholders, the Board of
       Directors or any committee of the Board of Directors of
BioMarin or BioMarin Nova Scotia;               

    (ii) contravene, conflict with or result in a violation of any
            applicable Legal Requirement or any order, writ, injunction,
             judgment or decree to which BioMarin or BioMarin Nova Scotia,
           or any of the assets owned or used by BioMarin, is subject,
               except in each case as would not have a Material Adverse Effect
on BioMarin;                                    

      (iii) contravene, conflict with or result in a violation or breach
               of, or result in a default under, any provision of any Contract
             to which BioMarin or any of its Subsidiaries is a party or by
             which BioMarin or any of its Subsidiaries is otherwise bound,
        or give any Person the right to (A) declare a default or
     exercise any remedy under any such BioMarin Contract,
               (B) accelerate the maturity or performance of any such BioMarin
             Contract, or (C) cancel, terminate or modify any term of such
         BioMarin Contract, in each case which could reasonably be
       expected to have a Material Adverse Effect on BioMarin;

          (iv) result in the imposition or creation of any Encumbrance upon or
       with respect to any asset owned or used by BioMarin; or

   (v)  give rise to any right of termination or acceleration of
             indebtedness, or cause any third party indebtedness to become
               due before its stated maturity or cause any available credit to
cease to be available;                          

A-19  

DEFM14A
209th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 209th
     (b) The execution and delivery of this Agreement by BioMarin and BioMarin
  Nova Scotia does not, and the performance of this Agreement by
       BioMarin and BioMarin Nova Scotia shall not, require any Consent or
         any filing with or notification to, any Governmental Body except: (i)
   applicable filings with Nasdaq; (ii) the Appropriate Regulatory
   Approvals; and (iii) such other filings, negotiations, permits,
       authorizations, consents or approvals that if not obtained, made or
     given, could not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect on BioMarin, or prevent
       consummation of the transactions or otherwise prevent BioMarin from
performing its obligations under this Agreement.            

3.7  Authority; Binding Nature of Agreement.  BioMarin and BioMarin Nova  
Scotia have the requisite corporate power and authority to perform their        
obligations hereunder and, subject to obtaining the Required BioMarin           
Stockholder Vote, to consummate the transactions contemplated hereby. The       
execution and delivery of this Agreement by each of BioMarin and BioMarin Nova  
Scotia and the consummation of the transactions contemplated hereby have been   
duly and validly authorized by all necessary action on the part of BioMarin and 
BioMarin Nova Scotia and their respective Boards of Directors and no further    
corporate proceedings on the part of either of these companies is required to   
authorize this Agreement or the transactions contemplated hereby other than the 
Required BioMarin Stockholder Vote. This Agreement has been duly and validly    
executed and delivered by BioMarin and BioMarin Nova Scotia, and, assuming the  
due authorization, execution and delivery by Glyko, constitutes a legal and     
binding obligation of BioMarin and BioMarin Nova Scotia, enforceable against    
each of them in accordance with its terms, subject to (i) laws of general       
application relating to bankruptcy, insolvency and the relief of debtors, and   
(ii) rules of law governing specific performance, injunctive relief and other   
equitable remedies.                                                             

3.8  SEC Filings; Financial Statements.                                   

   (a) BioMarin has filed with the SEC and has delivered or made available
  to Glyko (including through the SEC EDGAR system) accurate and
       complete copies (excluding copies of exhibits not available through
  the SEC EDGAR System) of all documents, including each report,
        registration statement and definitive proxy statement required to be
       filed by BioMarin with the SEC since January 1, 2000 (the "BioMarin
     SEC Documents"). As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this 
         Agreement, then on the date of such filing): (i) each of the BioMarin
       SEC Documents complied in all material respects with the applicable
        requirements of the United States 1933 Act or the United States 1934
         Act (as the case may be); and (ii) none of the BioMarin SEC Documents
        (including the financial statements contained therein) contained any
      untrue statement of a material fact or omitted to state a material
        fact required to be stated therein or necessary in order to make the
     statements therein, in the light of the circumstances under which
they were made, not misleading.                             

(b) Each set of financial statements (including, in each case, any  
  related notes thereto) contained in BioMarin SEC Documents and
     BioMarin's audited financial statements as at and for the periods
      ended through December 31, 2000 and BioMarin's unaudited financial
        statements as at and for the period ended through September 30, 2001
      (the "BioMarin Interim Financial Statements") comply as to form in
         all material respects with the published rules and regulations of the
         SEC applicable thereto and were prepared in accordance with U.S. GAAP
 applied on a consistent basis throughout the periods involved
       (subject, in the case of unaudited interim financial statements, to
     the absence of note disclosure and year end adjustments) and each
   fairly presents the financial position of BioMarin at the dates
    thereof and the results of its operations and cash flows for the
periods indicated.                                          

3.9  No Undisclosed Liabilities.  Except as disclosed in the BioMarin     
Disclosure Letter, BioMarin does not have any liabilities (absolute, accrued,   
contingent or otherwise) of a nature required to be disclosed on a balance      
sheet or in the related notes to the financial statements prepared in           
accordance with U.S. GAAP except: (a) liabilities provided for in the BioMarin  
Interim Financial Statements; (b) normal and recurring current                  

A-20  

DEFM14A
210th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 210th
liabilities incurred since September 30, 2001 in the ordinary course of         
business and consistent with past practices; (c) liabilities incurred in        
connection with the Arrangement; or (d) as could not reasonably be expected to  
have a Material Adverse Effect on BioMarin.                                     

3.10  Valid Issuance.  The BioMarin Common Stock to be issued under the   
Arrangement will, when issued in accordance with the provisions of this         
Agreement in all cases, be validly issued, fully paid and non-assessable and    
not subject to any preemptive rights or similar contractual rights granted by   
BioMarin.                                                                       

3.11  Listing.  The BioMarin Common Stock is listed on Nasdaq and the SWX 
Swiss Exchange.                                                                 

3.12  Legal Proceedings; Orders.                                          

    (a) There is no pending Legal Proceeding, and to BioMarin's Knowledge no
   Person has threatened to commence any Legal Proceeding (i) that
     involves BioMarin or any of the assets owned or used by BioMarin,
      except as disclosed in the BioMarin Disclosure Letter or (ii) that
    challenges, or that may have the effect of preventing, delaying,
        making illegal or otherwise interfering with, the Arrangement or any
of the other transactions contemplated by this Agreement. To
         BioMarin's Knowledge, no event has occurred, and no claim, dispute or
    other condition or circumstance exists, that could reasonably be
         expected to, give rise to or serve as a basis for the commencement of
any such Legal Proceeding.                                  

   (b) There is no material order, writ, injunction, judgment or decree to
      which BioMarin, or any of the assets owned or used by BioMarin, is
       subject. To BioMarin's Knowledge, no officer of BioMarin is subject
     to any order, writ, injunction, judgment or decree that prohibits
        such officer from engaging in or continuing any conduct, activity or
practice relating to the business of BioMarin.              

3.13  Absence of Certain Changes and Events.  Except as disclosed in the  
BioMarin Disclosure Letter and BioMarin SEC Documents filed during the calendar 
year 2001, since December 31, 2000 BioMarin has conducted its business only in  
the ordinary course and there has not been any event, change or effect that has 
had or could reasonably be expected to have a Material Adverse Effect relating  
to BioMarin.                                                                    

  3.14  Environmental Matters.  All operations of BioMarin are being conducted
and, to BioMarin's Knowledge, have been conducted in compliance in all material 
respects with all Environmental Laws. Except as BioMarin has publicly disclosed 
in the BioMarin SEC Documents, BioMarin is not subject to:                      

(a) any governmental or regulatory remedial or control action,      
proceeding, application, order or directive which relates to
   environmental, health or safety matters or any investigation or
     evaluation concerning environmental, health or safety matters; or

    (b) (i) any demand or notice with respect to the breach of, or liability
    under, any Environmental Laws and, (ii) to BioMarin's Knowledge,
         there are no facts or circumstances that could reasonably be expected
 to result in any such action, proceeding, application, order,
      directive, demand, or notice to which it would be subject which in
any case would have a Material Adverse Effect on BioMarin.  

3.15  Compliance; Permits.                                                

     (a) Except as could not reasonably be expected to have a Material Adverse
       Effect on BioMarin, BioMarin is not in conflict with, or in default
or violation of, (i) any Legal Requirement or Governmental  
      Authorization applicable to BioMarin or by which its properties is
   bound or affected, or (ii) any Contract, to which BioMarin is a
party, except for any conflicts, defaults or violations that
       (individually or in the aggregate) could not cause BioMarin to lose
       any material benefit or incur any material liability. Since January
1, 2000, BioMarin has not received any                      

A-21  

DEFM14A
211th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 211th
     notice or other communication from any Governmental Body or other
       Person regarding any actual or possible violation of, or failure to
        comply with, any Legal Requirement except as could not reasonably be
expected to have a Material Adverse Effect on BioMarin.     

     (b) Except as disclosed in the BioMarin SEC Documents, BioMarin holds all
       Governmental Authorizations necessary to enable BioMarin to conduct
        its business in the manner in which such business is currently being
 conducted, except where the failure to hold such Governmental
      Authorizations has not had and would not reasonably be expected to
     have a Material Adverse Effect on BioMarin. All such Governmental
       Authorizations are valid and in full force and effect. BioMarin is,
       and at all times has been, in substantial compliance with the terms
      and requirements of such Governmental Authorizations, except where
      the failure to be in compliance with the terms and requirements of
         such Governmental Authorizations has not had and would not reasonably
    be expected to have a Material Adverse Effect on BioMarin. Since
  January 1, 2000, BioMarin has not received any notice or other
        communication from any Governmental Body regarding (i) any actual or
possible violation of or failure to comply with any term or 
       requirement of any material Governmental Authorization, or (ii) any
        actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any material Governmental    
Authorization.                                              

3.16  Taxes.                                                              

   (a) BioMarin has timely filed all Returns relating to Taxes required to
     be filed by BioMarin with any Governmental Body, and such Returns
have been completed in accordance with Legal Requirements.  

    (b) BioMarin as of the Effective Time (i) will have paid within the time
         required by law, or accrued all Taxes it is required by law to pay or
         accrue and (ii) will have withheld from each payment made to its past
or present employees, officers, directors and independent   
         contractors, creditors, stockholders or other third parties all Taxes
    and other material deductions required by law to be withheld and
        have, within the time required by law, paid such withheld amounts to
the proper Governmental Bodies.                             

 (c) BioMarin has not been delinquent in the payment of any Tax nor is
      there any Tax deficiency outstanding, proposed or assessed against
    BioMarin, nor has BioMarin executed any waiver of any statute of
    limitations on or extensions of the period for the assessment or
       collection of any Tax. There are no matters relating to Taxes under
discussion between any Governmental Bodies and BioMarin.    

    (d) To BioMarin's Knowledge, no audit or other examination of any Return
        of BioMarin is currently in progress, nor has BioMarin been notified
     of any request for such an audit or other examination, nor is any
        taxing authority asserting or threatening to assert against BioMarin
any claim for Taxes.                                        

   (e) BioMarin does not have any liability for any unpaid Taxes which has
        not been accrued for or reserved on the BioMarin balance sheet dated
        September 30, 2001 in accordance with U.S. GAAP, whether asserted or
     unasserted, contingent or otherwise, other than any liability for
        unpaid Taxes that may have accrued since September 30, 2001 and that
are not yet payable.                                        

     (f) To BioMarin's Knowledge, the BioMarin Common Stock issued pursuant to
       the Arrangement will not constitute a "participating interest" in a
       "foreign investment entity" (as such terms are defined in the draft
       legislation to amend the Income Tax Act (Canada) released on August
         2, 2001) at the time of issuance. Based on its current business plan,
      BioMarin expects that the BioMarin Common Stock issued pursuant to
      the Arrangement will not constitute in the future a "participating
interest" in a "foreign investment entity" (as so defined). 

A-22  

DEFM14A
212th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 212th
   (g) Other than liabilities incurred in connection with the Arrangement,
        BioMarin Nova Scotia does not have material liabilities of any kind,
including, without limitation, liabilities for Taxes.       

     (h) BioMarin Nova Scotia has been and will be at all times, from the date
        of its formation through and including the Effective Date and at all
      other relevant times, treated as a "disregarded entity" within the
         meaning of United States Treasury Regulation Section 301.7701-3(2)(C)
for United States federal income tax purposes.              

3.17  Contracts.  (a) BioMarin has not violated or breached, or committed 
any default under, any BioMarin Contract, except for violations, breaches and   
defaults that have not had and would not reasonably be expected to have a       
Material Adverse Effect on BioMarin; and, to BioMarin's Knowledge, no other     
Person has violated or breached, or committed any default under, any BioMarin   
Contract, except for violations, breaches or defaults that have not had and     
would not reasonably be expected to have a Material Adverse Effect on BioMarin; 
and (b) to BioMarin's Knowledge, no event has occurred, and no circumstance or  
condition exists, that (with or without notice or lapse of time) will, or could 
reasonably be expected to, (i) result in a violation or breach of any of the    
provisions of any BioMarin Contract, (ii) give any Person the right to declare  
a default or exercise any remedy under any BioMarin Contract, (iii) give any    
Person the right to accelerate the maturity or performance of any BioMarin      
Contract, or (iv) give any Person the right to cancel, terminate or modify any  
BioMarin Contract, except in each such case for defaults, acceleration rights,  
termination rights and other rights that have not had and would not reasonably  
be expected to have a Material Adverse Effect on BioMarin.                      

3.18  Vote Required.  The Required BioMarin Stockholder Vote is the only  
vote of the holders of any class or series of BioMarin's shares necessary to    
approve the transactions contemplated hereby.                                   

 3.19  Brokers.  Except for UBS Warburg LLC, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in     
connection with the Arrangement or any of the other transactions contemplated   
by this Agreement based upon arrangements made by or on behalf of BioMarin.     
BioMarin has furnished to Glyko accurate and complete copies of all agreements  
under which any such fees, commissions or other amounts have been paid or may   
become payable and all indemnification and other agreements related to the      
engagement of UBS Warburg LLC.                                                  

  3.20  Intellectual Property.  Except as disclosed in the BioMarin Disclosure
Letter or the BioMarin SEC Documents:                                           

    (a) To BioMarin's Knowledge, BioMarin owns or possesses sufficient legal
      rights to all Intellectual Property used in BioMarin's business as
currently conducted and material thereto;                   

   (b) to BioMarin's Knowledge, the BioMarin Intellectual Property and the
        conduct of the business of BioMarin do not infringe upon, violate or
breach the Intellectual Property rights of any other Person;

    (c) to BioMarin's Knowledge, no Person is infringing any of the BioMarin
Intellectual Property; and                                  

 (d) BioMarin has not received any written notice or claim challenging
   BioMarin respecting the validity of, use of or ownership of the
      BioMarin Intellectual Property, and to BioMarin's Knowledge, there
      are no facts upon which such a challenge could be made which could
         reasonably be expected to have a Material Adverse Effect on BioMarin.

 3.21  Opinion of Financial Advisor.  The Board of Directors of BioMarin has
received the opinion of UBS Warburg LLC, financial advisor to BioMarin, dated   
the date of this Agreement, to the effect that, as of such date, the Exchange   
Ratio is fair to BioMarin from a financial point of view (the "BioMarin         
Opinion"). BioMarin will furnish an accurate and complete copy of said opinion  
to Glyko solely for informational purposes after receipt thereof by BioMarin.   

A-23  

DEFM14A
213th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 213th
  3.22  Board Approval.  The Board of Directors of BioMarin (at a meeting duly
called and held) has (a) determined (pursuant to a unanimous vote of all        
members of the Board of Directors of BioMarin entitled to vote thereon) that    
the issuance of BioMarin Common Stock in connection with the Arrangement is     
fair to shareholders of BioMarin and in the best interests of BioMarin and (b)  
determined as of the date hereof to recommend that the holders of BioMarin      
Common Stock vote in favor of the issuance of BioMarin Common Stock in          
connection with the Arrangement.                                                

ARTICLE 4 

CONDUCT PRIOR TO THE EFFECTIVE TIME 

4.1  Access and Investigation.  During the period from the date of this   
Agreement through the Effective Time (the "Pre-Closing Period"), Glyko shall:   
(a) provide BioMarin and BioMarin's Representatives with reasonable access      
during normal business hours to Glyko's Representatives, personnel and to all   
existing books, records, Tax Returns, work papers and other documents and       
information relating to Glyko; and (b) provide BioMarin and BioMarin's          
Representatives with such copies of the existing books, records, Tax Returns,   
work papers and other documents and information relating to Glyko, and with     
such additional financial, operating and other data and information regarding   
Glyko, as BioMarin may reasonably request at BioMarin's expense.                

4.2  Operation of Glyko's Business.                                       

   (a) During the Pre-Closing Period: (i) Glyko shall conduct its business
         and operations (A) in the ordinary course and in accordance with past
        practices based on Glyko's operating history since June 30, 2000 and
    (B) in compliance with all applicable Legal Requirements and the
requirements of all Glyko Contracts that constitute Material
   Contracts (ii) Glyko shall preserve intact its current business
         organization, keep available the services of its current officers and
    other employees and maintain its relations and goodwill with all
       Persons having business relationships with Glyko; (iii) Glyko shall
      (to the extent requested by BioMarin) cause its officers to report
        regularly to BioMarin concerning the status of Glyko's business; and
     (iv) Glyko shall maintain its books of account and records in the
        usual, regular and ordinary manner, in accordance with Canadian GAAP
applied on a consistent basis.                              

   (b) During the Pre-Closing Period, Glyko shall not except: (1) with the
      prior written consent of BioMarin not to be unreasonably withheld;
     (2) with respect to any matters disclosed in the Glyko Disclosure
       Letter; or (3) with respect to any matter expressly contemplated by
this Agreement or the Arrangement:                          

     (i)  declare, accrue, set aside or pay any dividend or make any
             other distribution in respect of any shares of capital stock,
          or repurchase, redeem or otherwise reacquire any shares of
capital stock or other securities;              

       (ii) sell, issue, grant or authorize the issuance or grant of (A)
          any capital stock or other security, (B) any Option, call,
      warrant or right to acquire any capital stock or other
   security, or (C) any instrument convertible into or
            exchangeable for any capital stock or other security (except
       that Glyko may issue Glyko Common Shares upon the valid
             exercise of Glyko Stock Options outstanding as of the date of
this Agreement);                                

   (iii) amend or waive any of its rights under, or accelerate the
         vesting under, any provision of the Stock Option Plan, or
            otherwise modify any of the terms of any outstanding Option,
               warrant or other security or any related Contract other than as
contemplated in Section 6.11;                   

     (iv) amend or permit the adoption of any amendment to the Glyko
             Charter Documents, or effect or become a party to any merger,
consolidation, amalgamation, share exchange,    

A-24  

DEFM14A
214th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 214th
           business combination, recapitalization, reclassification of
               shares, stock split, division or subdivision of shares, reverse
            stock split, consolidation of shares or similar transaction;

      (v)  form any Subsidiary or acquire any equity interest or other
interest in any other Entity;                   

(vi) make capital expenditures above $25,000 in aggregate;

    (vii) enter into or become bound by, or permit any of the assets
              owned or used by it to become bound by, any Material Contract,
              or amend or terminate, or waive or exercise any material right
         or remedy under, any Material Contract, other than in the
           ordinary course of business consistent with past practices;

    (viii) acquire, lease or license any right or other asset from any
         other Person or sell or otherwise dispose of, or lease or
               license, any right or other asset to any other Person, or waive
or relinquish any material right;               

(ix) lend money to any Person, or incur or guarantee any  
indebtedness;                                   

       (x)  establish, adopt or amend any employee benefit plan, pay any
        bonus, make any severance payment or benefit or make any
               profit-sharing or similar payment to, or increase the amount of
        the wages, salary, commissions, fringe benefits or other
              compensation or remuneration payable to, any of its directors,
officers or employees;                          

(xi) hire any employee;                                   

(xii) change any of its personnel policies or other business
           policies, or any of its methods of accounting or accounting
practices in any respect;                       

(xiii) make any Tax election;                                 

(xiv) commence or settle any Legal Proceeding;              

         (xv) enter into any material transaction or take any other material
              action outside the ordinary course of business or inconsistent
            with past practices based on Glyko's operating history since
June 30, 2000; or                               

         (xvi) agree or commit to take any of the actions described in clauses
"(i)" through "(xv)" of this Section 4.2(b).    

ARTICLE 5 

GLYKO SHAREHOLDER APPROVAL AND BIOMARIN STOCKHOLDER APPROVAL  

5.1  Joint Proxy Circular; Board Recommendations; Other Filings.          

 (a) As promptly as practicable after the execution of this Agreement,
     BioMarin and Glyko will prepare the Joint Proxy Circular. Each of
BioMarin and Glyko shall provide promptly to the other such 
       information concerning its business and financial and other affairs
 as, in the reasonable judgment of the requesting party or its
      counsel, may be required or appropriate for inclusion in the Joint
       Proxy Circular, or in any amendments or supplements thereto, and to
        cause its counsel and auditors to cooperate with the other's counsel
      and auditors in the preparation of the Joint Proxy Circular. Glyko
     will afford BioMarin an opportunity to review all materials to be
  submitted to the Court, and shall make all such changes as are
        reasonably requested by BioMarin. Glyko will respond to any comments
  of the Court with the assistance of BioMarin, and will use its
       commercially reasonable efforts to have the Interim Order issued as
         promptly as practicable after such filing. Each of Glyko and BioMarin
        will cause the Joint Proxy Circular to be mailed to its shareholders
     at the earliest practicable time after the Interim Order has been
      granted by the Court. As promptly as practicable after the date of
this Agreement, each of Glyko and BioMarin will             

A-25  

DEFM14A
215th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 215th
 prepare and file any other filings required to be filed by it
         pursuant to the requirements of the CBCA, the Interim Order, Canadian
         Securities Legislation, the TSE and any other Canadian, United States
  or other laws relating to the Arrangement and the transactions
       contemplated by this Agreement (the "Other Filings"). Each of Glyko
       and BioMarin will notify the other promptly upon the receipt of any
comments from the Court or its staff or any other government
       officials and of any request by the Court or its staff or any other
         government officials for amendments or supplements to the Joint Proxy
       Circular or any Other Filing or for additional information and will
         supply the other with copies of all correspondence between such party
        or any of its Representatives, on the one hand, and the Court or its
    staff or any other government officials, on the other hand, with
     respect to the Joint Proxy Circular, the Arrangement or any Other
       Filing. Each of Glyko and BioMarin will cause all documents that it
is responsible for filing with the Court or other regulatory
   authorities under this Section 5.1(a) to comply in all material
      respects with all applicable requirements of law and the rules and
       regulations promulgated thereunder. Whenever any event occurs which
    is required to be set forth in an amendment or supplement to the
       Joint Proxy Circular or any Other Filing, Glyko or BioMarin, as the
      case may be, will promptly inform the other of such occurrence and
cooperate in filing with the Court or its staff or any other
     government officials, and/or mailing to shareholders of Glyko and
BioMarin, such amendment or supplement.                     

     (b) Each of Glyko and BioMarin shall ensure that the information supplied
       by it in writing for inclusion in the Joint Proxy Circular does not
      contain any untrue statement of a material fact or omit to state a
        material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the 
circumstances in which they are made.                       

    (c) Subject to Section 5.2(c), the Joint Proxy Circular will include (i)
    the recommendation of the Board of Directors of Glyko that Glyko
     shareholders vote in favor of approval of the Continuance and the
    Arrangement, (ii) the Glyko Opinion referred to in Section 2.21,
       (iii) the recommendation of the Board of Directors of BioMarin that
       BioMarin's stockholders vote in favor of the Arrangement including,
    without limitation, the issuance of the BioMarin Common Stock in
 connection with the Arrangement and (iv) the BioMarin Opinion
referred to in Section 3.21.                                

(d) As soon as practicable after the execution of this Agreement,   
        BioMarin shall prepare, with the co-operation of Glyko, applications
         and will file such applications with the Commissions and exercise its
         commercially reasonable efforts to cause the Commissions to grant the
  Securities Exemption Orders. BioMarin and Glyko shall each use
        commercially reasonable efforts to cause such applications to comply
     with the requirements of Canadian Securities Legislation. Each of
   BioMarin and Glyko agrees to provide promptly to the other such
       information concerning its business and financial and other affairs
 as, in the reasonable judgment of the requesting party or its
 counsel, may be required or appropriate for inclusion in such
     applications, or in any amendments or supplements thereto, and to
         cause its counsel and auditors to co-operate with the other's counsel
   and auditors in the preparation of such application. Glyko will
         promptly advise BioMarin, and BioMarin will promptly advise Glyko, in
       writing, if at any time prior to the Effective Time either Glyko or
   BioMarin shall obtain knowledge of any facts that might make it
       necessary or appropriate to amend or supplement the applications in
       order to make the statements contained or incorporated by reference
therein not misleading or to comply with applicable law.    

5.2  Meeting of Glyko Shareholders.                                       

   (a) Promptly after the date hereof, Glyko will take all action pursuant
to the requirements of the CBCA, the Interim Order, Canadian
      Securities Legislation (and all other applicable securities laws),
         the TSE and Glyko Charter Documents to convene the Glyko Shareholders
         Meeting to be held as promptly as practicable, and in any event Glyko
will use its commercially reasonable                        

A-26  

DEFM14A
216th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 216th
       efforts to convene such meeting not later than May 31, 2002 for the
     purpose of voting upon the Continuance and the Arrangement. Glyko
        shall ensure that the Glyko Shareholders Meeting is called, noticed,
   convened, held and conducted, and that all proxies solicited in
    connection with the Glyko Shareholders Meeting are solicited, in
    compliance with all applicable Legal Requirements (including the
     Interim Order and Glyko Charter Documents). Glyko's obligation to
         call, give notice of, convene and hold the Glyko Shareholders Meeting
  in accordance with this Section 5.2(a) shall not be limited or
       otherwise affected by the commencement, disclosure, announcement or
   submission of any Superior Offer or other Acquisition Proposal.
Subject to any withheld, withdrawn, amended or modified     
     recommendation of the Glyko Board of Directors in accordance with
         Section 5.2(c), Glyko will use its commercially reasonable efforts to
         solicit from its shareholders proxies in favor of the approval of the
      Arrangement. Notwithstanding anything to the contrary contained in
        this Agreement, Glyko may adjourn or postpone the Glyko Shareholders
Meeting to the extent necessary to ensure that any necessary
      supplement or amendment to the Joint Proxy Circular is provided to
       Glyko's shareholders in advance of a vote on the Continuance or the
      Arrangement or, if as of the time for which the Glyko Shareholders
    Meeting is originally scheduled (as set forth in the Joint Proxy
    Circular) there are insufficient Glyko Common Shares represented
      (either in Person or by proxy) to constitute a quorum necessary to
conduct the business of the Glyko Shareholders Meeting.     

  (b) Subject to Section 5.2(c), neither the Board of Directors of Glyko
       nor any committee thereof shall withhold, withdraw, amend or modify
       in a manner adverse to BioMarin, the recommendation of the Board of
     Directors of Glyko that Glyko's shareholders vote in favor of and
adopt and approve the Arrangement and the Continuance.      

 (c) Nothing in this Agreement shall prevent the Board of Directors of
   Glyko from: (i) complying with Section 99 of the Securities Act
      (Ontario) with regard to any Acquisition Transaction or making any
   other disclosure required by applicable law so long as any such
    disclosure rejects any Acquisition Transaction and reaffirms its
         recommendation of the transactions contemplated by this Agreement, or
       taking any other action to the extent ordered or otherwise mandated
by any court of competent jurisdiction; or (ii) withholding,
         withdrawing, amending or modifying its recommendation in favor of the
    Arrangement if: (A) a Superior Offer is made to Glyko and is not
     withdrawn; (B) neither Glyko nor any of its Representatives shall
       have violated any of the restrictions set forth in Section 6.2 (a);
      (C) the Board of Directors of Glyko concludes in good faith, after
 consultation with its outside counsel, that, in light of such
Superior Offer, the withholding, withdrawal, amendment or   
    modification of such recommendation is required in order for the
        Board of Directors of Glyko to comply with its fiduciary obligations
     under applicable law; and (D) Glyko's Board of Directors does not
withdraw, amend or modify its recommendation in favor of the
        Arrangement for at least 72 hours after Glyko provides BioMarin with
        the name of the Person making such Superior Offer and a copy of such
        Superior Offer. Nothing contained in this Section 5.2(c) shall limit
    Glyko's obligation to call, give notice of, convene and hold the
        Glyko Shareholders Meeting (regardless of whether the recommendation
         of the Board of Directors of Glyko shall have been withdrawn, amended
or modified).                                               

     (d) During the 72-hour period referred to in Section 5.2(c)(ii)(D), Glyko
      acknowledges that BioMarin shall have the opportunity, but not the
     obligation, to offer to amend the terms of this Agreement and the
      Arrangement. The Glyko Board of Directors will review any offer by
        BioMarin to amend the terms of this Agreement in good faith in order
    to determine, in its discretion in the exercise of its fiduciary
    obligations, whether BioMarin's offer to amend the terms of this
         Agreement upon acceptance by Glyko would result in the Superior Offer
      continuing to be a Superior Offer. If the Glyko Board of Directors
       determines that the Superior Offer is no longer a Superior Offer in
         light of BioMarin's amended offer, the parties hereto will enter into
an amended agreement reflecting BioMarin's amended offer.   

A-27  

DEFM14A
217th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 217th
5.3  Meeting of BioMarin Stockholders.  Promptly after the date hereof,   
BioMarin will take all action pursuant to the requirements of the Delaware      
General Corporation Law, the United States 1933 Act, the United States 1934 Act 
(and all other applicable securities laws), Nasdaq, SWX Swiss Exchange and      
BioMarin Charter Documents to convene the BioMarin Stockholders Meeting to be   
held as promptly as practicable, and in any event BioMarin will use its         
commercially reasonable efforts to convene such meeting not later than May 31,  
2002 for the purpose of considering the approval of the Arrangement including,  
without limitation, the issuance of the BioMarin Common Stock in connection     
with the Arrangement.                                                           

ARTICLE 6 

ADDITIONAL AGREEMENTS 

6.1  Confidentiality; Access to Information.                              

(a) The parties acknowledge that Glyko and BioMarin have previously 
        executed a Mutual Confidentiality Agreement, dated as of January 10,
 2002 (the "Confidentiality Agreement"), which Confidentiality
    Agreement (other than Sections 10, 11 and 12 thereof which shall
         terminate and be of no further force or effect) will continue in full
     force and effect in accordance with its terms. In the event of an
       inconsistency in the terms and conditions of this Agreement and the
        terms and conditions of the Confidentiality Agreement, the terms and
conditions of this Agreement shall prevail.                 

   (b) Each of Glyko and BioMarin will afford the other and its respective
        auditors, counsel and other Representatives reasonable access during
     normal business hours, upon reasonable notice, to the properties,
        books, records and personnel of Glyko and BioMarin during the period
        prior to the Effective Time to obtain all information concerning the
  business of Glyko or BioMarin, as may be reasonably requested.
     Notwithstanding the foregoing, BioMarin shall not be obligated to
       provide Glyko and its Representatives with any information relating
   to product development efforts, clinical results and scientific
    information. No information or knowledge obtained by BioMarin or
       Glyko in any investigation pursuant to this Section 6.1 will affect
   or be deemed to modify any representation or warranty contained
 herein or the conditions to the obligations of the parties to
consummate the Arrangement.                                 

6.2  No Solicitation.                                                     

  (a) Glyko shall not directly or indirectly, and shall not authorize or
     permit any Representative of Glyko directly or indirectly to: (i)
solicit, initiate, knowingly encourage or induce the making,
        submission or announcement of any Acquisition Proposal; (ii) furnish
 any confidential information regarding Glyko to any Person in
    connection with or in response to an Acquisition Proposal; (iii)
         engage in discussions or negotiations with any Person with respect to
    any Acquisition Proposal; (iv) approve, endorse or recommend any
   Acquisition Proposal; or (v) enter into any letter of intent or
        similar document or any Contract contemplating or otherwise relating
        to any Acquisition Transaction; provided, however, that prior to the
  adoption and approval of the Arrangement by the Required Glyko
Shareholder Vote, Glyko and its Representatives shall not be
     prohibited by (and shall not be considered to have violated) this
      Section 6.2(a) from (A) furnishing nonpublic information regarding
      Glyko to any Person in response to an Acquisition Proposal that is
      submitted by such Person (and not withdrawn), or (B) entering into
      discussions with any Person in response to an Acquisition Proposal
       that is submitted by such Person (and not withdrawn), if (1) in the
       case of clause (A) above, the Board of Directors of Glyko has first
         made a good faith determination that the furnishing of such nonpublic
  information to such Person is reasonably likely to lead to the
      submission of a Superior Offer from such Person, (2) neither Glyko
  nor any Representative of Glyko shall have violated any of the
restrictions set forth in this                              

A-28  

DEFM14A
218th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 218th
         Section 6.2(a), (3) the Board of Directors of Glyko concludes in good
       faith, based upon the advice of its outside legal counsel, that the
  failure to take such action is inconsistent with its fiduciary
      obligations under applicable law, (4) prior to furnishing any such
     nonpublic information to, or entering into discussions with, such
       Person, Glyko gives BioMarin written notice of the identity of such
        Person and of Glyko's intention to furnish nonpublic information to,
        or enter into discussions with, such Person, and Glyko receives from
such Person an executed confidentiality agreement containing
    customary limitations on the use and disclosure of all nonpublic
         written and oral information furnished to such Person by or on behalf
     of Glyko and following which, Glyko keeps BioMarin fully informed
       with respect to the status of any such Acquisition Proposal and any
   modification or proposed modification thereto, and (5) prior to
   furnishing any such nonpublic information to such Person, Glyko
        furnishes such nonpublic information to BioMarin (to the extent such
       nonpublic information has not been previously furnished by Glyko to
BioMarin).                                                  

     (b) Glyko shall immediately cease and cause to be terminated any existing
         discussions between (i) Glyko and any of its Representatives and (ii)
any other Person that relate to any Acquisition Proposal.   

6.3  Public Disclosure.  BioMarin and Glyko will consult with each other, 
and to the extent practicable, agree, before issuing any press release or       
otherwise making any public statement with respect to the Arrangement or this   
Agreement and will not issue any such press release announcing this Agreement   
and the transactions contemplated hereby or make any such public statement      
prior to such consultation, except as may be required by law or any listing     
agreement with a national securities exchange.                                  

6.4  Reasonable Efforts.  Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use all commercially     
reasonable efforts to take, or cause to be taken, all actions, and to do, or    
cause to be done, and to assist and cooperate with the other parties in doing,  
all things necessary, proper or advisable to consummate and make effective, in  
the most expeditious manner practicable, the Arrangement and the other          
transactions contemplated by this Agreement, including using commercially       
reasonable efforts to accomplish the following: (a) the taking of all           
reasonable acts necessary to cause the conditions precedent set forth in        
Article 7 to be satisfied; (b) the obtaining of the Appropriate Regulatory      
Approvals and all other necessary actions, waivers, consents, approvals, orders 
and authorizations from Governmental Bodies and the making of all necessary     
registrations, declarations and filings (including registrations, declarations  
and filings with Governmental Bodies, if any) and the taking of all reasonable  
steps as may be necessary to avoid any suit, claim, action, investigation or    
proceeding by any Governmental Body; (c) the obtaining of all consents,         
approvals or waivers from third parties required as a result of the             
transactions contemplated in this Agreement; (d) the defending of any suits,    
claims, actions, investigations or proceedings, whether judicial or             
administrative, challenging this Agreement or the consummation of the           
transactions contemplated hereby, including seeking to have any stay or         
temporary restraining order entered by any court or other Governmental Body     
vacated or reversed; (e) the execution or delivery of any additional            
instruments reasonably necessary to consummate the transactions contemplated    
by, and to fully carry out the purposes of, this Agreement; and (f) the         
preparation of the Joint Proxy Circular and the calling and holding of the      
Glyko Shareholders Meeting and the BioMarin Stockholders Meeting.               

6.5  Notification.                                                        

 (a) Glyko shall give prompt notice to BioMarin in writing of: (i) the
         discovery of any event, condition, fact or circumstance that occurred
        or existed on or prior to the date of this Agreement and that caused
 or constitutes a material inaccuracy in any representation or
        warranty made by Glyko in this Agreement; (ii) any event, condition,
        fact or circumstance that occurs, arises or exists after the date of
this Agreement and that would cause or constitute a material
      inaccuracy in any representation or warranty made by Glyko in this
        Agreement if (A) such representation or warranty had been made as of
     the time of the occurrence, existence or discovery of such event,

A-29  

DEFM14A
219th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 219th
       condition, fact or circumstance, or (B) such event, condition, fact
      or circumstance had occurred, arisen or existed on or prior to the
date of this Agreement; (iii) any event, condition, fact or 
        circumstance that would, or would be likely to, result in a material
        breach of any covenant or obligation of Glyko or that would make the
       timely satisfaction of any of the conditions set forth in Article 7
 impossible or unlikely or that has had or could reasonably be
    expected to have a Material Adverse Effect on Glyko; or (iv) any
      failure of Glyko to comply with or satisfy in any material respect
         any covenant, condition or agreement to be complied with or satisfied
      by it under this Agreement, in each case, such that the conditions
    set forth in Section 7.3(a) or 7.3(b) would not be satisfied. No
        notification given to BioMarin pursuant to this Section 6.5(a) shall
     limit or otherwise affect any of the representations, warranties,
        covenants or obligations of Glyko contained in this Agreement or any
right or remedy of BioMarin with respect thereto.           

 (b) BioMarin shall give prompt notice to Glyko in writing of: (i) the
         discovery of any event, condition, fact or circumstance that occurred
        or existed on or prior to the date of this Agreement and that caused
 or constitutes a material inaccuracy in any representation or
        warranty made by BioMarin or BioMarin Nova Scotia in this Agreement;
       (ii) any event, condition, fact or circumstance that occurs, arises
      or exists after the date of this Agreement and that would cause or
      constitute a material inaccuracy in any representation or warranty
     made by BioMarin or BioMarin Nova Scotia in this Agreement if (A)
       such representation or warranty had been made as of the time of the
        occurrence, existence or discovery of such event, condition, fact or
        circumstance, or (B) such event, condition, fact or circumstance had
occurred, arisen or existed on or prior to the date of this 
    Agreement; (iii) any event, condition, fact or circumstance that
    would, or would be likely to, result in a material breach of any
      covenant or obligation of BioMarin or BioMarin Nova Scotia or that
         would make the timely satisfaction of any of the conditions set forth
in Article 7 impossible or unlikely or that has had or could
         reasonably be expected to have a Material Adverse Effect on BioMarin;
     or (iv) any failure of BioMarin or BioMarin Nova Scotia to comply
      with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this 
  Agreement, in each case, such that the conditions set forth in
    Section 7.2(a) or 7.2(b) would not be satisfied. No notification
 given to Glyko pursuant to this Section 6.5(b) shall limit or
         otherwise affect any of the representations, warranties, covenants or
      obligations of BioMarin and BioMarin Nova Scotia contained in this
   Agreement or any right or remedy of Glyko with respect thereto.

6.6  Third Party Consents.  As soon as practicable following the date     
hereof, BioMarin and Glyko will each use its commercially reasonable efforts to 
obtain any consents, waivers and approvals under its or any of its or its       
Subsidiaries' respective Contracts required to be obtained in connection with   
the consummation of the transactions contemplated hereby.                       

6.7  Nasdaq and SWX Swiss Exchange Listing.  BioMarin agrees to use       
commercially reasonable efforts to cause the listing on Nasdaq and the SWX      
Swiss Exchange of the shares of BioMarin Common Stock issuable in connection    
with the Arrangement with effect as and from the Effective Date, in the case of 
Nasdaq, and as soon as practicable thereafter, in the case of the SWX Swiss     
Exchange.                                                                       

6.8  Glyko Affiliate Agreement.  Set forth in Glyko Disclosure Letter is a
list of those Persons who may be deemed to be, in Glyko's reasonable judgment   
(which shall be concurred with by BioMarin), affiliates of Glyko (other than    
BioMarin) within the meaning of Rule 145 promulgated under the United States    
1933 Act (each, a "Glyko Affiliate"). Glyko will provide BioMarin with such     
information and documents as BioMarin reasonably requests for purposes of       
reviewing such list. Each Glyko Affiliate Agreement will be in full force and   
effect as of the Effective Time. BioMarin will be entitled to place appropriate 
legends on the certificates evidencing any BioMarin Common Stock to be received 
by any Glyko Affiliate pursuant to the terms of this Agreement, and to issue    
appropriate stop transfer instructions to the transfer agent for the BioMarin   
Common Stock, consistent with the terms of any Glyko Affiliate Agreement.       

A-30  

DEFM14A
220th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 220th
6.9  Listing of Glyko Common Shares.  Glyko shall use commercially        
reasonable efforts to ensure that the Glyko Common Shares remain listed on the  
TSE up until and including the Effective Time.                                  

6.10  Indemnification of Directors and Officers.                          

(a) From and after the Effective Date, BioMarin will cause Glyko to 
      fulfill and honor in all respects the obligations of Glyko (or any
 predecessor corporation) pursuant to (i) each indemnification
         agreement currently in effect between Glyko and each person who is or
       was a director or officer of Glyko (or any predecessor corporation)
        prior to the Effective Date (the "Indemnified Parties") and (ii) any
     indemnification provision under the Glyko Charter Documents as in
       effect on the date hereof. The Articles of Incorporation and Bylaws
    of Glyko will contain provisions with respect to exculpation and
     indemnification that are at least as favorable to the Indemnified
         Parties as those contained in Glyko Charter Documents as in effect on
      the date hereof, which provisions will not be amended, repealed or
       otherwise modified for a period of six (6) years from the Effective
        Date in any manner that would adversely affect the rights thereunder
        of any Indemnified Party or of individuals who, immediately prior to
      the Effective Date, were employees or agents of Glyko, unless such
modification is required by law.                            

     (b) For a period of six (6) years after the Effective Date, BioMarin will
maintain or cause Glyko to maintain in effect, to the extent
    available, directors' and officers' liability insurance covering
     those persons who are currently covered by Glyko's directors' and
   officers' liability insurance policy on terms equivalent in all
      material respects to those applicable to the current directors and
        officers of Glyko; provided, however, that in no event will BioMarin
         or Glyko be required to expend an annual premium for such coverage in
       excess of 150 percent of the amount of the last annual premium paid
      by Glyko prior to the date of this Agreement for such coverage and
  provided, further, that if the annual premium payable for such
       insurance coverage exceeds such amount, BioMarin shall be obligated
         to obtain a policy with the greatest coverage available for an annual
        premium not exceeding such amount. The obligations of BioMarin under
   this Section 6.10 shall not be terminated or modified in such a
   manner as to adversely affect any Indemnified Party without the
         consent of such Indemnified Party (it being expressly agreed that the
  Indemnified Parties shall be third party beneficiaries of this
Section 6.10).                                              

6.11  Stock Options.                                                      

(a) Pursuant to the Plan of Arrangement, each Glyko Stock Option    
   outstanding immediately before the Implementation Time shall be
     exchanged for a stock option (a "Replacement Option") of BioMarin
        granted in accordance with BioMarin's 1997 Stock Plan, as amended on
  December 22, 1998 (a copy of which has been made available for
        Glyko's review). In accordance with the Plan of Arrangement: (i) the
         number of shares of BioMarin Common Stock subject to each Replacement
         Option shall be equal to the number of Glyko Common Shares subject to
 the corresponding Glyko Stock Option immediately prior to the
       Implementation Time multiplied by the Exchange Ratio, rounding down
       to the nearest whole share; (ii) the per share exercise price under
         each Replacement Option shall be adjusted by dividing the U.S. Dollar
         Equivalent (calculated on the date of the Implementation Time) of the
       per share exercise price under the corresponding Glyko Stock Option
  by the Exchange Ratio and rounding up to the nearest cent; and
        (iii) any restriction on the exercise of any such Glyko Stock Option
    shall continue in full force and effect and the term and vesting
         schedule of such Glyko Stock Option shall otherwise remain unchanged,
        except for such changes as are triggered by the Plan of Arrangement.

  (b) Glyko shall take all action that may be necessary (under the Stock
   Option Plan and otherwise) to effectuate the provisions of this
       Section 6.11 and to ensure that, from and after the Effective Time,
      holders of Glyko Stock Options have no rights with respect thereto
other than those specifically provided in this Section 6.11.

A-31  

DEFM14A
221st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 221st
   (c) The BioMarin Common Stock issuable upon exercise of the Replacement
      Options will be registered on a registration statement on Form S-8
under the United States 1933 Act on the Effective Date.     

6.12  Treatment as a Reorganization for U.S. Tax Purposes.  BioMarin      
represents, warrants and covenants:                                             

  (a) BioMarin has not taken (and does not intend to take), and does not
      intend to cause Glyko to take, any action that reasonably would be
 expected (i) to cause the Arrangement to fail to qualify as a
       "reorganization" within the meaning of Section 368(a) of the United
         States Code or (ii) to cause Glyko to not be considered a corporation
for United States federal income tax purposes.              

(b) Each of BioMarin and Glyko shall report the Arrangement as      
      "reorganization" within the meaning of 368(a) of the United States
      Code for United States federal income tax purposes and comply with
any applicable reporting requirements.                      

  (c) Upon request of any former holder of Glyko Common Shares, BioMarin
  shall provide (or cause Glyko to provide) such holder with any
   information necessary for such holder to comply with any United
        States Tax filings related to such holder's ownership or disposition
of Glyko Common Shares.                                     

(d) After the Effective Time, BioMarin shall cause Glyko to pay any 
   amounts owed in respect of Dissenting Shares out of Glyko's own
  funds. No funds will be supplied for that purpose (directly or
       indirectly) by BioMarin, nor will BioMarin (directly or indirectly)
          reimburse Glyko for any payments in respect of such Dissenting Shares.

    (e) The Arrangement is not part of the same plan pursuant to which Glyko
         transferred its assets to BioMarin on October 7, 1998 in exchange for
BioMarin Common Stock and cash.                             

    (f) Other than payments in respect to Dissenting Shares and cash paid in
        lieu of fractional shares, BioMarin will acquire Glyko Common Shares
      solely in exchange for BioMarin voting stock. For purposes of this
       Section 6.12(f), (i) Glyko Common Shares redeemed for cash or other
    property furnished by BioMarin will be considered as acquired by
         BioMarin; (ii) any payments made to holders of Glyko Common Shares in
      respect of Dissenting Shares shall be made solely from Glyko's own
        funds; and (iii) the payment of cash in lieu of fractional shares is
       solely for the purpose of avoiding the expense and inconvenience to
BioMarin of issuing fractional shares and does not represent
      separately bargained for consideration. Further, for United States
       federal income tax purposes, no liabilities of Glyko or the holders
of Glyko Common Shares will be assumed by BioMarin.         

ARTICLE 7 

CONDITIONS TO THE ARRANGEMENT 

  7.1  Conditions to Obligations of Each Party to Effect the Arrangement.  The
respective obligations of each party to this Agreement to effect the            
Arrangement shall be subject to the satisfaction at or prior to the Closing     
Date of the following conditions:                                               

(a) Glyko Shareholder Approval.  The Continuance and the Arrangement
         shall have been duly approved by the Required Glyko Shareholder Vote,
         and in accordance with any additional conditions which may be imposed
by the Interim Order and which are satisfactory to Glyko.   

  (b) BioMarin Stockholder Approval.  The Arrangement including, without
       limitation, the issuance of the BioMarin Common Stock in connection
       with the Arrangement, shall have been duly approved by the Required
BioMarin Stockholder Vote.                                  

A-32  

DEFM14A
222nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 222nd
(c)  Court Orders.  The Interim Order and the Final Order shall each have been  
       obtained in form and on terms satisfactory to BioMarin and Glyko,
and shall not have been set aside or modified in a manner 
   unacceptable to such parties on appeal or otherwise; and upon
    receipt of the Interim Order and the Final Order, no shares of
   BioMarin Common Stock to be issued at the Effective Time will
          require registration pursuant to the United States 1933 Act and such
          shares will be exempt from registration pursuant to Section 3(a)(10)
of the United States 1933 Act.                            

(d)  No Order; HSR Act.  No Governmental Body shall have enacted, issued,   
   promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether 
         temporary, preliminary or permanent) which is in effect and which has
the effect of restraining or prohibiting consummation of the
        transactions contemplated by this Agreement. All waiting periods, if
       any, under the HSR Act and the Competition Act (Canada) relating to
        the transactions contemplated hereby will have expired or terminated
 early or all antitrust approvals under Canadian or other laws
       required to be obtained prior to the Arrangement in connection with
  the transactions contemplated hereby shall have been obtained.

(e)  Nasdaq Listing.  The BioMarin Common Stock issuable in connection with the 
     Arrangement shall have been authorized for listing on Nasdaq.

(f)  Securities Exemption Orders.  The Securities Exemption Orders shall have   
          been obtained and be in form and substance satisfactory to
BioMarin and Glyko, acting reasonably.          

(g)  No Governmental Litigation.  There shall not be pending or threatened  
         any Legal Proceeding in which a Governmental Body is or is threatened
        to become a party or is otherwise involved, and neither BioMarin nor
     Glyko shall have received any communication from any Governmental
     Body in which such Governmental Body indicates the possibility of
   commencing any Legal Proceeding or taking any other action: (i)
      challenging or seeking to restrain or prohibit the consummation of
         the Arrangement or any of the other transactions contemplated by this
     Agreement; (ii) relating to the Arrangement and seeking to obtain
      from BioMarin or any of its Subsidiaries, or Glyko, any damages or
   other relief that may be material to BioMarin; (iii) seeking to
         prohibit or limit in any material respect BioMarin's ability to vote,
     receive dividends with respect to or otherwise exercise ownership
  rights with respect to the stock of Glyko; or (iv) which would
        materially and adversely affect the right of BioMarin or of Glyko to
own the assets or operate the business of Glyko.            

(h)  Approvals.  All Appropriate Regulatory Approvals required under this       
                   Agreement shall have been obtained (all of which shall be
                in full force and effect), except where the failure to
              obtain any Appropriate Regulatory Approval would not
              prevent consummation of the Arrangement or otherwise
                 prevent any of the parties hereto from performing their
                   respective obligations under this Agreement, or could not
                  reasonably be expected to have a Material Adverse Effect
on BioMarin or Glyko.                 

  7.2  Additional Conditions to Obligations of Glyko.  The obligation of Glyko
to consummate and effect the Arrangement shall be subject to the satisfaction   
at or prior to the Closing Date of each of the following conditions, any of     
which may be waived in writing, exclusively by Glyko:                           

    (a) Representations and Warranties.  Each representation and warranty of
     BioMarin and BioMarin Nova Scotia contained in this Agreement (i)
       shall have been true and correct in all material respects as of the
    date of this Agreement and (ii) shall be true and correct in all
       material respects on and as of the Closing Date with the same force
    and effect as if made on the Closing Date except for (A) changes
    contemplated by this Agreement and (B) those representations and
        warranties which address matters only as of a particular date (which
    representations shall have been true and correct (subject to the
       qualifications as set forth in the preceding clause (A)) as of such
particular date (it being understood that, for purposes of  
        determining the accuracy of such representations and warranties, any
representations and warranties subject to "materiality" or  

A-33  

DEFM14A
223rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 223rd
         "Material Adverse Effect" qualifiers shall be true and correct in all
     respects, and any minor update of or modification to the BioMarin
        Disclosure Letter made or purported to have been made after the date
of this Agreement shall be disregarded).                    

 (b) Agreements and Covenants.  BioMarin and BioMarin Nova Scotia each
      shall have performed or complied in all material respects with all
       agreements and covenants required by this Agreement to be performed
or complied with by it on or prior to the Closing Date.     

  (c) No Material Adverse Change.  There shall have occurred no Material
  Adverse Change with respect to BioMarin since the date of this
Agreement.                                                  

 (d) Certificate.  Glyko shall have received a certificate executed on
         behalf of BioMarin by its Chief Executive Officer confirming that the
       conditions set forth in Sections 7.2(a), (b) and (c) have been duly
satisfied.                                                  

   (e) Legal Opinions.  Glyko shall have received (i) an opinion of United
States counsel to BioMarin, in form and substance reasonably
   satisfactory to Glyko, with respect to the matters set forth in
       Exhibit D to this Agreement and (ii) an opinion of Canadian counsel
  to BioMarin, in form and substance satisfactory to Glyko, with
    respect to the matters set forth in Exhibit E to this Agreement.

 7.3  Additional Conditions to the Obligations of BioMarin.  The obligations
of BioMarin to consummate and effect the Arrangement shall be subject to the    
satisfaction at or prior to the Closing Date of each of the following           
conditions, any of which may be waived in writing, exclusively by BioMarin:     

    (a) Representations and Warranties.  Each representation and warranty of
  Glyko contained in this Agreement (i) shall have been true and
         correct in all material respects as of the date of this Agreement and
        (ii) shall be true and correct in all material respects on and as of
        the Closing Date with the same force and effect as if made on and as
   of the Closing Date except (A) for changes contemplated by this
    Agreement and (B) for those representations and warranties which
       address matters only as of a particular date (which representations
      shall have been true and correct (subject to the qualifications as
      set forth in the preceding clause (A)) as of such particular date)
       (it being understood that, for purposes of determining the accuracy
   of such representations and warranties, any representations and
    warranties subject to "materiality" or "Material Adverse Effect"
         qualifiers shall be true and correct in all material respects and any
       minor update of or modification to the Glyko Disclosure Letter made
         or purported to have been made after the date of this Agreement shall
be disregarded).                                            

    (b) Agreements and Covenants.  Glyko shall have performed or complied in
       all material respects with all agreements and covenants required by
        this Agreement to be performed or complied with by it at or prior to
the Closing Date.                                           

     (c) Dissenters.  Holders of no more than one (1) percent in the aggregate
of the issued and outstanding Glyko Common Shares shall have
     exercised (and not withdrawn such exercise) Dissenters' Rights in
respect of the Arrangement or the Continuance.              

  (d) No Material Adverse Change.  There shall have occurred no Material
          Adverse Change with respect to Glyko since the date of this Agreement.

(e) Certificates and Resignations.  BioMarin shall have received:   

    (i)  a certificate executed on behalf of Glyko by its Chairman
            confirming that the conditions set forth in Sections 7.3(a),
(b), (c) and (d) have been duly satisfied; and  

    (ii) the written resignations of all directors and officers of
Glyko, effective as of the Effective Time.      

A-34  

DEFM14A
224th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 224th
     (f) Legal Opinion.  BioMarin shall have received (i) an opinion of United
States counsel to Glyko, in form and substance reasonably   
      satisfactory to BioMarin, with respect to the matters set forth in
         Exhibit F hereto and (ii) an opinion of Canadian counsel to Glyko, in
        form and substance reasonably satisfactory to BioMarin, with respect
to the matters set forth in Exhibit G to this Agreement.    

ARTICLE 8 

TERMINATION, AMENDMENT AND WAIVER 

  8.1  Termination.  This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the requisite approval of the           
shareholders of Glyko or stockholders of BioMarin:                              

    (a) mutual written consent duly authorized by the Boards of Directors of
BioMarin and Glyko;                                         

  (b) by either Glyko or BioMarin if the Arrangement shall not have been
        consummated by June 15, 2002 for any reason; provided, however, that
         the right to terminate this Agreement under this Section 8.1(b) shall
         not be available to any party whose action or failure to act has been
         a principal cause of or resulted in the failure of the Arrangement to
  occur on or before such date and such action or failure to act
constitutes a breach of this Agreement;                     

    (c) by either Glyko or BioMarin if a Governmental Body shall have issued
     an order, decree or ruling or taken any other action, in any case
        having the effect of permanently restraining, enjoining or otherwise
     prohibiting the Arrangement, which order, decree, ruling or other
action is final and non-appealable;                         

 (d) by either BioMarin or Glyko if (i) the Glyko Shareholders Meeting
         (including any adjournments or postponements thereof) shall have been
        held and completed and Glyko's shareholders shall have taken a final
      vote on a proposal to approve the Continuance and the Arrangement,
     and (ii) either the Continuance or the Arrangement shall not have
        been approved at such meeting by the Required Glyko Shareholder Vote
        (and shall not have been approved at any adjournment or postponement
thereof);                                                   

    (e) by either BioMarin or Glyko if (i) the BioMarin Stockholders Meeting
         (including any adjournments or postponements thereof) shall have been
      held and completed and stockholders of BioMarin shall have taken a
  final vote on a proposal to approve the Arrangement including,
without limitation, the issuance of BioMarin Common Stock in
         connection with the Arrangement, and (ii) such Arrangement including,
        without limitation, the issuance of BioMarin Common Stock, shall not
have been approved at such meeting by the Required BioMarin 
         Stockholder Vote (and shall not have been approved at any adjournment
or postponement thereof);                                   

 (f) by Glyko, upon a material breach of any representation, warranty,
         covenant or agreement on the part of BioMarin or BioMarin Nova Scotia
     set forth in this Agreement, or if any material representation or
  warranty of BioMarin or BioMarin Nova Scotia shall have become
        untrue, in either case such that the conditions set forth in Section
     7.2(a) or Section 7.2(b) would not be satisfied as of the time of
 such breach or as of the time such material representation or
        warranty shall have become untrue, provided, that if such inaccuracy
         in BioMarin's representations and warranties or breach by BioMarin is
curable by BioMarin through the exercise of its commercially
         reasonable efforts, then Glyko may not terminate this Agreement under
      this Section 8.1(f) for thirty (30) days after delivery of written
   notice from Glyko to BioMarin of such breach, provided BioMarin
      continues to exercise commercially reasonable efforts to cure such
 breach (it being understood that Glyko may not terminate this
         Agreement pursuant to this Section 8.1(f) if it shall have materially
         breached this Agreement or if such breach by BioMarin is cured during
such thirty (30)-day period);                               

A-35  

DEFM14A
225th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 225th
    (g) by BioMarin, upon a material breach of any representation, warranty,
covenant or agreement on the part of Glyko set forth in this
     Agreement, or if any material representation or warranty of Glyko
         shall have become untrue, in either case such that the conditions set
       forth in Section 7.3(a) or Section 7.3(b) would not be satisfied as
of the time of such breach or as of the time such material  
       representation or warranty shall have become untrue, provided, that
   if such inaccuracy in Glyko's representations and warranties or
   breach by Glyko is curable by Glyko through the exercise of its
         commercially reasonable efforts, then BioMarin may not terminate this
  Agreement under this Section 8.1(g) for thirty (30) days after
     delivery of written notice from BioMarin to Glyko of such breach,
        provided Glyko continues to exercise commercially reasonable efforts
  to cure such breach (it being understood that BioMarin may not
        terminate this Agreement pursuant to this Section 8.1(g) if it shall
         have materially breached this Agreement or if such breach by Glyko is
cured during such 30-day period); or                        

   (h) by BioMarin, upon a breach of the provisions of Section 6.2 of this
Agreement.                                                  

 8.2  Notice of Termination; Effect of Termination.  Any termination of this
Agreement under Section 8.1 will be effective immediately upon (or, if the      
termination is pursuant to Section 8.1(f) or Section 8.1(g) and the proviso     
therein is applicable, thirty (30) days after) the delivery of written notice   
of the terminating party to the other parties hereto. In the event of the       
termination of this Agreement as provided in Section 8.1, this Agreement shall  
be of no further force or effect and no party shall have any further liability  
hereunder, except (i) as set forth in this Section 8.2, Section 8.3 and Article 
9, each of which shall survive the termination of this Agreement, and (ii)      
nothing herein shall relieve any party from liability for any intentional or    
wilful breach of this Agreement. No termination of this Agreement shall affect  
the obligations of the parties contained in the Confidentiality Agreement, all  
of which obligations (other than as set forth in Section 6.1(a)) shall survive  
termination of this Agreement in accordance with their terms.                   

8.3  Fees and Expenses.                                                   

(a) General.  Except as set forth in this Section 8.3, all fees and 
expenses incurred in connection with this Agreement and the 
         transactions contemplated hereby shall be paid by the party incurring
such expenses whether or not the Arrangement is consummated.

(b) Glyko Payments.                                                 

      (i)  Glyko shall pay to BioMarin in immediately available funds,
              within two (2) business days after written demand by BioMarin,
        an amount equal to $1,000,000(the "Termination Fee") if:
        (A) this Agreement is terminated by BioMarin pursuant to
               Section 8.1(g); or (B) this Agreement is terminated by Glyko or
          BioMarin pursuant to Section 8.1(d) and (1) an Acquisition
        Proposal shall have been publicly announced or otherwise
               communicated to the Board of Directors of Glyko or shareholders
          of Glyko after the date of this Agreement and prior to the
      Glyko Shareholders Meeting and (2) Glyko enters into a
   definitive agreement with respect to an Acquisition
       Transaction, or an Acquisition Transaction is otherwise
               consummated (provided that for the purposes of this Section 8.3
           (b)(i)(B) the term "Acquisition Transaction" shall have the
          meaning ascribed to that term in Section 10.1, except that
        references to "20 percent" therein shall be deemed to be
               references to "50 percent"), after the date hereof and prior to
              the expiration of six (6) months following termination of this
Agreement.                                      

   (ii) Glyko acknowledges that the agreements contained in this
       Section 8.3(b) are an integral part of the transactions
       contemplated by this Agreement, and that, without these
         agreements, BioMarin would not enter into this Agreement;
         accordingly, if Glyko fails to pay in a timely manner the
            amounts due pursuant to this Section 8.3(b) and, in order to
             obtain such payment, BioMarin makes a claim that results in a
        judgment against Glyko for the amounts set forth in this
          Section 8.3(b), Glyko shall pay to BioMarin its reasonable

A-36  

DEFM14A
226th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 226th
            costs and expenses (including reasonable attorneys' fees and
              expenses) in connection with such suit, together with interest
            on the amounts set forth in this Section 8.3(b) at the prime
               rate of UBS Paine Webber in effect on the date such payment was
          required to be made. Payment of the fees described in this
              Section 8.3(b) shall not be in lieu of damages incurred in the
event of breach of this Agreement.              

(c) BioMarin Payments.                                              

      (i)  BioMarin shall pay to Glyko in immediately available funds,
               within two (2) business days after written demand by Glyko, the
         Termination Fee, if this Agreement is terminated by Glyko
            pursuant to Section 8.1(f). BioMarin may pay the Termination
            Fee to Glyko (without demand having been made by Glyko prior
            thereto) on not less than 10 business days' notice to Glyko.

      (ii) BioMarin acknowledges that the agreements contained in this
       Section 8.3(c) are an integral part of the transactions
       contemplated by this Agreement, and that, without these
      agreements, Glyko would not enter into this Agreement;
            accordingly, if BioMarin fails to pay in a timely manner the
            amounts due pursuant to this Section 8.3(c) and, in order to
          obtain such payment, Glyko makes a claim that results in a
           judgment against BioMarin for the amounts set forth in this
          Section 8.3(c), BioMarin shall pay to Glyko its reasonable
            costs and expenses (including reasonable attorneys' fees and
              expenses) in connection with such suit, together with interest
            on the amounts set forth in this Section 8.3(c) at the prime
              rate of UBS Paine Webberin effect on the date such payment was
          required to be made. Payment of the fees described in this
              Section 8.3(c) shall not be in lieu of damages incurred in the
event of breach of this Agreement.              

8.4  Amendment.  This Agreement may be amended with the approval of the   
respective Boards of Directors of Glyko and BioMarin at any time (whether       
before or after the approval of the Arrangement by the shareholders of BioMarin 
or Glyko); provided, however, that after any such approval of the Arrangement   
by the shareholders of BioMarin or Glyko, no amendment shall be made which by   
law requires further approval of the shareholders of BioMarin or Glyko, as the  
case may be, without such further approval. This Agreement may not be amended   
except by an instrument in writing signed on behalf of each of the parties      
hereto.                                                                         

 8.5  Extension; Waiver.  At any time prior to the Effective Time, any party
hereto may, to the extent legally permitted: (i) extend the time for the        
performance of any of the obligations or other acts of the other parties        
hereto; (ii) waive any inaccuracies in the representations and warranties made  
to such party contained herein or in any document delivered pursuant hereto;    
and (iii) waive compliance with any of the agreements or conditions for the     
benefit of such party contained herein. Any agreement on the part of a party    
hereto to any such extension or waiver shall be valid only if set forth in an   
instrument in writing signed on behalf of such party. Delay in exercising any   
right under this Agreement shall not constitute a waiver of such right.         

ARTICLE 9 

GENERAL PROVISIONS  

9.1  Non-Survival of Representations and Warranties.  The representations 
and warranties of Glyko, BioMarin and BioMarin Nova Scotia contained in this    
Agreement shall terminate at the Effective Time, and only the covenants that by 
their terms survive the Effective Time shall survive the Effective Time.        

9.2  Notices.  All notices and other communications hereunder shall be in 
writing and shall be deemed given if delivered Personally or by commercial      
delivery service, or sent via telecopy (receipt confirmed) to the               

A-37  

DEFM14A
227th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 227th
parties at the following addresses or telecopy numbers (or at such other        
address or telecopy numbers for a party as shall be specified by like notice):  

(a) if to BioMarin to:          

    BioMarin Pharmaceutical Inc.
    371 Bel Marin Keys Boulevard
Suite 210               
Novato, California 94949

Attention: Fredric Price
            Chairman and Chief Executive Officer

     Telephone No.: (415) 884-6715
    Telecopy No.: (415) 382-7889

with a copy to:         

     Cassels Brock & Blackwell LLP
Scotia Plaza, Suite 2100
40 King Street West     
Toronto, Ontario M5H 3C2

     Attention: Mark Bennett, Esq.

     Telephone No.: (416) 869-5407
    Telecopy No.: (416) 350-6933

and to:                 

             Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street 
23/rd/ Floor            
          Los Angeles, California 90071-2371

      Attention: Siobhan Burke, Esq.

     Telephone No.: (213) 683-6282
    Telecopy No.: (213) 627-0705

(b) if to Glyko, to:            

Glyko Biomedical Ltd.   
199 Bay Street          
   Box 25, Commerce Court West
Toronto, Ontario M5L 1A9

Attention: Joerg Gruber 
Chairman                

         Telephone No.: +44 (20) 7349-3101
        Telecopy No.: +44 (20) 7349-3140

with a copy to:         

    Blake, Cassels & Graydon LLP
199 Bay Street          
   Box 25, Commerce Court West
Toronto, Ontario M5L 1A9

A-38  

DEFM14A
228th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 228th
       Attention: John A. Kolada, Esq.

     Telephone No.: (416) 863-4171
     Facsimile No.: (416) 863-2653

9.3  Interpretation.  When a reference is made in this Agreement to       
Exhibits, such reference shall be to an Exhibit to this Agreement unless        
otherwise indicated. When a reference is made in this Agreement to Sections,    
such reference shall be to a Section of this Agreement. Unless otherwise        
indicated the words "include," "includes" and "including" when used herein      
shall be deemed in each case to be followed by the words "without limitation."  
The table of contents and headings contained in this Agreement are for          
reference purposes only and shall not affect in any way the meaning or          
interpretation of this Agreement. When reference is made herein to "the         
business of" an Entity, such reference shall be deemed to include the business  
of all direct and indirect Subsidiaries of such Entity. Reference to the        
Subsidiaries of an Entity shall be deemed to include all direct and indirect    
Subsidiaries of such Entity.                                                    

9.4  Counterparts.  This Agreement may be executed in one or more         
counterparts, all of which shall be considered one and the same agreement and   
shall become effective when one or more counterparts have been signed by each   
of the parties and delivered to the other party, it being understood that all   
parties need not sign the same counterpart.                                     

9.5  Entire Agreement; Third Party Beneficiaries.  This Agreement and the 
documents and instruments and other agreements among the parties hereto as      
contemplated by or referred to herein, including Glyko Disclosure Letter and    
the BioMarin Disclosure Letter (a) constitute the entire agreement among the    
parties with respect to the subject matter hereof and supersede all prior       
agreements and understandings, both written and oral, among the parties with    
respect to the subject matter hereof, it being understood that the              
Confidentiality Agreement shall continue in full force and effect until the     
Closing and shall survive any termination of this Agreement (other than as set  
forth in Section 6.1(a)); and (b) are not intended to confer upon any other     
Person any rights or remedies hereunder except as provided under Section 6.10.  

9.6  Severability.  In the event that any provision of this Agreement, or 
the application thereof, becomes or is declared by a court of competent         
jurisdiction to be illegal, void or unenforceable, the remainder of this        
Agreement will continue in full force and effect and the application of such    
provision to other Persons or circumstances will be interpreted so as           
reasonably to effect the intent of the parties hereto. The parties further      
agree to replace such void or unenforceable provision of this Agreement with a  
valid and enforceable provision that will achieve, to the extent possible, the  
economic, business and other purposes of such void or unenforceable provision.  

9.7  Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the state of Delaware, regardless of the laws that 
might otherwise govern under applicable principles of conflicts of laws         
thereof. In any action between the parties arising out of or relating to this   
Agreement or any of the transactions contemplated by this Agreement: (a) each   
of the parties irrevocably and unconditionally consents and submits to the      
non-exclusive jurisdiction and venue of the state and federal courts located in 
the state of California; (b) if any such action is commenced in a state court,  
then, subject to applicable law, no party shall object to the removal of such   
action to any federal court located in the Northern District of California;     
(c); each of the parties hereby waives, and agrees not to assert in any such    
action, any claim that it is not personally subject to the jurisdiction of such 
court, that the action is brought in an inconvenient forum or that the venue of 
the action is improper; and (d) each of the parties irrevocably consents to     
service of process by first class certified mail, return receipt requested,     
postage prepaid, to the address at which such party is to receive notice in     
accordance with Section 9.2.                                                    

9.8  Rules of Construction.  The parties hereto agree that they have been 
represented by counsel during the negotiation and execution of this Agreement   
and, therefore, waive the application of any law, regulation,                   

A-39  

DEFM14A
229th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 229th
holding or rule of construction providing that ambiguities in an agreement or   
other document will be construed against the party drafting such agreement or   
document.                                                                       

9.9  Assignment.  This Agreement shall be binding upon, and shall be      
enforceable by and inure solely to the benefit of, the parties hereto and their 
respective successors and assigns; provided, however, that (i) neither this     
Agreement nor any of Glyko's rights hereunder may be assigned by Glyko without  
the prior written consent of BioMarin and (ii) neither this Agreement nor any   
of BioMarin's or BioMarin Nova Scotia's rights hereunder may be assigned by     
BioMarin or BioMarin Nova Scotia without the prior written consent of Glyko     
(other than an assignment to a direct or indirect wholly-owned Subsidiary of    
BioMarin provided that such assignment shall not release BioMarin from          
liability hereunder), and any attempted assignment of this Agreement or any of  
such rights by Glyko or BioMarin and BioMarin Nova Scotia, as the case may be,  
without such consent or except as provided for herein shall be void and of no   
effect.                                                                         

9.10  WAIVER OF JURY TRIAL.  EACH OF BIOMARIN, BIOMARIN NOVA SCOTIA AND   
GLYKO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,       
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)       
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF BIOMARIN,        
BIOMARIN NOVA SCOTIA AND GLYKO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE  
AND ENFORCEMENT HEREOF.                                                         

9.11  Currency.  Unless otherwise specified, all sums of money referred to
in this Agreement are expressed in U.S. currency.                               

9.12  Glyko Disclosure Letter.  The Glyko Disclosure Letter shall be      
arranged in separate parts corresponding to the numbered and lettered sections  
contained in Article 2 and Section 6.8, and the information disclosed in any    
numbered or lettered part shall be deemed to relate to and to qualify only the  
particular representation or warranty set forth in the corresponding numbered   
or lettered section in Article 2 and Section 6.8, and shall not be deemed to    
relate to or to qualify any other representation or warranty.                   

9.13  BioMarin Disclosure Letter.  The BioMarin Disclosure Letter shall be
arranged in separate parts corresponding to the numbered and lettered sections  
contained in Article 3, and the information disclosed in any numbered or        
lettered part shall be deemed to relate to and to qualify only the particular   
representation or warranty set forth in the corresponding numbered or lettered  
section in Article 3, and shall not be deemed to relate to or to qualify any    
other representation or warranty.                                               

9.14  Attorneys' Fees.  In any action at law or suit in equity to enforce 
this Agreement or the rights of any of the parties hereunder commenced or       
initiated after the Effective Date, the prevailing party in such action or suit 
shall be entitled to receive a reasonable sum for its attorneys' fees and all   
other reasonable costs and expenses incurred in such action or suit.            

ARTICLE 10  

ADDITIONAL DEFINITIONS  

 10.1  Additional Definitions.  In this Agreement, unless there is something
in the subject matter or context inconsistent therewith, the following terms    
shall have the following meanings respectively:                                 

"Acquisition Proposal" means any offer, proposal or inquiry (other than an
offer or proposal by BioMarin) contemplating or otherwise relating to any       
Acquisition Transaction.                                                        

"Acquisition Transaction" means any transaction or series of transactions 
involving:                                                                      

 (a) any merger, consolidation, amalgamation, share exchange, business
   combination, issuance of securities, acquisition of securities,
    tender offer, exchange offer or other similar transaction (i) in

A-40  

DEFM14A
230th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 230th
      which Glyko is a constituent company, or (ii) in which a Person or
 "group" (as defined in the United States 1934 Act) of Persons
     directly or indirectly acquires beneficial or record ownership of
     securities representing, or exchangeable for or convertible into,
      more than 20 percent of the outstanding securities of any class of
voting securities of Glyko;                                 

(b) any sale, lease, exchange, transfer, license, acquisition or    
  disposition of more than 20 percent of the assets of Glyko; or

(c) any liquidation or dissolution of Glyko.                        

"Agreement" means this Acquisition Agreement for a Plan of Arrangement, as
it may be amended from time to time.                                            

  "Appropriate Regulatory Approvals" means those sanctions, rulings, consents,
orders, exemptions, permits and other approvals (including the lapse, without   
objection, of a prescribed time under a statute or regulation that states that  
a transaction may be implemented if a prescribed time lapses following the      
giving of notice without an objection being made) of Governmental Bodies,       
regulatory agencies or self-regulatory organizations, as set out in Exhibit C   
to this Agreement.                                                              

"Approvals" means franchises, grants, authorizations, licenses, permits,  
easements, consents, certificates, approvals and orders.                        

"Arrangement" means a plan of arrangement under Section 192 of the CBCA on
the terms and subject to the conditions set out in this Agreement and the Plan  
of Arrangement, subject to any amendments or variations thereto made in         
accordance with the provisions of this Agreement or made at the direction of    
the Court in the Final Order.                                                   

"Arrangement Resolution" means the special resolution of the holders of   
Glyko Common Shares approving the Arrangement to be substantially in the form   
and content of Exhibit A annexed hereto.                                        

"Articles of Arrangement" means the articles of arrangement of Glyko in   
respect of the Arrangement, required by the CBCA to be filed with the Director  
after the Final Order is made.                                                  

  "BioMarin Common Stock" means the common stock of BioMarin, par value $0.001
per share.                                                                      

"BioMarin Contract" means any Contract to which BioMarin or any of its    
Subsidiaries is a party or by which it or any of its Subsidiaries is bound.     

"BioMarin Intellectual Property" means the Intellectual Property owned by 
BioMarin used in BioMarin's business as currently conducted and material        
thereto.                                                                        

"BioMarin's Knowledge" means the best of the knowledge of BioMarin, based 
upon the knowledge of any of the directors and officers of BioMarin after due   
and reasonable inquiry of such matter.                                          

"BioMarin Stockholders Meeting" means the meeting of the stockholders of  
BioMarin to consider and approve the issuance of BioMarin Common Stock in       
connection with the Arrangement and such other matters as may be necessary in   
connection with the other transactions contemplated by this Agreement.          

 "Board of Directors" when used with respect to an Entity means the board of
directors of such Entity.                                                       

"Canadian GAAP" means those accounting principles generally recognized as 
being accepted in Canada from time to time as set out in the handbook published 
by the Canadian Institute of Chartered Accountants.                             

A-41  

DEFM14A
231st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 231st
"Canadian Securities Legislation" means the statutory securities laws in  
each province of Canada applicable to Glyko, together with the regulations      
promulgated thereunder, together with the rules, policies, orders and           
requirements of the securities regulatory authorities in each such province.    

"CBCA" means the Canada Business Corporations Act, as amended.            

"Commissions" means the securities commissions which administer Canadian  
Securities Legislation.                                                         

"Consent" means any approval, consent, ratification, permission, waiver,  
permit or authorization (including any Governmental Authorization).             

"Continuance" means the discontinuance of Glyko under the CBCA pursuant to
Section 188 of the CBCA and the continuance of Glyko under the BC Act pursuant  
to Section 36 of the BC Act.                                                    

"Continuance Resolution" means the special resolution of the holders of   
Glyko Common Shares approving the Continuance in accordance with the            
requirements of the CBCA.                                                       

"Contract" means any written, oral or other agreement, contract,          
subcontract, lease, understanding, instrument, note, option, warranty, purchase 
order, license, sublicense, insurance policy, benefit plan or commitment or     
undertaking of any nature.                                                      

"Court" means the Ontario Superior Court of Justice.                      

  "Director" means the Director or other duly authorized person performing the
duties as Director under the CBCA.                                              

"Dissenters' Rights" has the meaning ascribed thereto in section 1.6.     

"Dissenting Shares" has the meaning ascribed thereto in section 1.6.      

"Effective Date" means the date shown on the certificate of arrangement to
be issued by the Director under the CBCA giving effect to the Arrangement.      

   "Effective Time" has the meaning ascribed thereto in the Plan of Arrangement.

"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage,    
security interest, encumbrance, claim, infringement, interference, option,      
right of first refusal, pre-emptive right, community property interest or       
restriction of any nature (including any restriction on the voting of any       
security, any restriction on the transfer of any security or other asset, any   
restriction on the receipt of any income derived from any asset, any            
restriction on the use of any asset and any restriction on the possession,      
exercise or transfer of any other attribute of ownership of any asset).         

"Entity" means any corporation (including any non-profit corporation),    
general partnership, limited partnership, limited liability partnership, joint  
venture, estate, trust, company (including any company limited by shares,       
limited liability company or joint stock company), firm, society or other       
enterprise, association, organization or other entity.                          

  "Environmental Laws" means all applicable Legal Requirements relating to the
protection of the environment, including any such environmental laws relating   
to a discharge, spill, emission or other release, whether actual or potential,  
of any contaminant (as defined in the Environmental Protection Act (Ontario))   
and any other applicable legislation, regulation or guideline, as well as any   
environmental order, directive or decision rendered by any Governmental Body.   

A-42  

DEFM14A
232nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 232nd
  "Exchange Ratio" means the portion of a share of BioMarin Common Stock to be
issued in exchange for each Glyko Common Share being equal to 11,367,617        
divided by the total number of outstanding Glyko Common Shares as of the        
Effective Time.                                                                 

"Final Order" means the final order of the Court approving the Arrangement
as such order may be amended at any time prior to the Effective Date or, if     
appealed, then, unless such appeal is withdrawn or denied, as affirmed.         

"Glyko Common Shares" means the common shares of Glyko as currently       
constituted.                                                                    

"Glyko Contract" means any Contract to which Glyko is a party or by which 
Glyko is bound.                                                                 

  "Glyko's Knowledge" means the actual knowledge (without independent inquiry)
of the directors of Glyko.                                                      

"Glyko Regulatory Reports" means all the filings and documents, including 
any schedules included therein, required to be filed by Glyko pursuant to       
Canadian Securities Legislation and the requirements of the TSE.                

 "Glyko Shareholders Meeting" means the meeting of the shareholders of Glyko
to consider the Continuance Resolution and the Arrangement Resolution.          

"Glyko Stock Option" means Options to acquire Glyko Common Shares pursuant
to the Stock Option Plan.                                                       

"Governmental Authorization" means any: (a) permit, license, certificate, 
franchise, permission, variance, clearance, registration, qualification,        
exemption, order, approval or authorization issued, granted, given or otherwise 
made available by or under the authority of any Governmental Body or pursuant   
to any Legal Requirement; or (b) right under any Contract with any Governmental 
Body.                                                                           

 "Governmental Body" means any: (a) nation, state, provincial, commonwealth,
province, territory, county, municipality, district or other jurisdiction of    
any nature; (b) federal, state, provincial, local, municipal, foreign or other  
government; or (c) governmental, quasi-governmental or regulatory authority of  
any nature (including any governmental division, department, agency,            
commission, instrumentality, official, ministry, fund, foundation, centre,      
organization, unit, body or Entity and any court or other tribunal and          
including the SEC, OSC, TSE, SWX Swiss Exchange and Nasdaq.                     

  "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.                                                                        

"Implementation Time" has the meaning ascribed thereto in the Plan of     
Arrangement.                                                                    

   "Intellectual Property" means industrial and intellectual property including:

 (a) all registered or unregistered trade-marks, trade names, business
         names, domain names, brand names, brands, designs, logos, identifying
       indicia and service marks, including any goodwill attaching thereto
and all registrations and applications relating thereto     
(collectively, the "Trade-Marks");                          

(b) all inventions, patents, patent rights, patent applications     
(including all reissues, divisions, continuations,          
continuations-in-part and extensions of any patent or patent
         application), industrial designs and applications for registration of
industrial designs;                                         

  (c) all copyrights, registrations and applications for registration of
      copyrights and works of authorship including all computer programs
(including source code), databases and related works; and   

A-43  

DEFM14A
233rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 233rd
(d) all processes, data, trade secrets, designs, know-how, product  
       information, manuals, technology, research and development reports,
       technical information, technical assistance, design specifications,
and similar materials recording or evidencing expertise or  
proprietary information.                                    

"Interim Order" means the interim order of the Court in respect of the    
Arrangement, as contemplated by Section 1.3.                                    

"Joint Proxy Circular" means the notice of the Glyko Shareholders' Meeting
and the notice of the BioMarin Stockholders' Meeting and accompanying           
management information circular and proxy statement to be sent to holders of    
Glyko Common Shares in connection with the Glyko Shareholders' Meeting and to   
be sent to holders of BioMarin Common Stock in connection with the BioMarin     
Stockholders' Meeting, including all appendices thereto.                        

"Legal Proceeding" means any action, suit, litigation, arbitration or     
proceeding (including any civil, criminal, administrative, investigative or     
appellate proceeding) before any court or other Governmental Body or any        
arbitrator or arbitration panel.                                                

"Legal Requirement" means (i) any federal, state, provincial, regional,   
local, municipal, foreign or other law, statute, constitution, principle of     
common law, edict, decree, rule, regulation, ruling or requirement issued,      
enacted, adopted, promulgated, implemented or otherwise put into effect by or   
under the authority of any Governmental Body and (ii) all requirements set      
forth in applicable Contracts.                                                  

"License Agreements" has the meaning ascribed thereto in the definition of
"Licensed Intellectual Property";                                               

 "Licensed Intellectual Property" means all Intellectual Property used under
licenses and other contracts granting a license or other right to use such      
Intellectual Property (''License Agreements'');                                 

"Material Adverse Effect" or "Material Adverse Change," when used in      
connection with an Entity, means any change, event, violation, inaccuracy,      
circumstance or effect, individually or when aggregated with other changes,     
events, violations, inaccuracies, circumstances or effects (considered together 
with all other matters that would constitute exceptions to the representations  
and warranties set forth in this Agreement but for the presence of "Material    
Adverse Effect" or other materiality qualifications, or any similar             
qualifications, in such representations and warranties), that is or could       
reasonably be expected to be materially adverse to or have a material adverse   
effect on (a) the business, assets (including intangible assets),               
capitalization, condition, liabilities, financial performance or results of     
operations of such Entity and its Subsidiaries taken as a whole; provided,      
however, that no Material Adverse Effect or Material Adverse Change shall be    
deemed to have occurred solely as a result of any change in (i) the trading     
price of BioMarin Common Stock or Glyko Common Shares, respectively, that is    
unrelated to any change, event or circumstance materially adverse to the        
business, assets (including intangible assets), capitalization, condition,      
liabilities, financial performance or results of operations of BioMarin or      
Glyko, as the case may be, (ii) Canadian GAAP or U.S. GAAP or (iii) any         
federal, state, provincial, regional, local, municipal, foreign or other law,   
statute, constitution, principle of common law edict, decree, rule, regulation, 
ruling or requirement issued, enacted, adopted, promulgated, implemented or     
otherwise put into effect by or under the authority of any Governmental Body or 
(b) the ability of the Entity or its Subsidiaries to consummate the Arrangement 
or any of the other transactions contemplated by this Agreement or to perform   
any of its obligations under this Agreement.                                    

"Material Contract" means and includes:                                   

         (i)  any Contract relating to the employment of, or the performance
        of services by, any employee or consultant; any Contract
              pursuant to which Glyko is or may become obligated to make any
           severance, termination or similar payment to any current or
former employee                                 

A-44  

DEFM14A
234th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 234th
               or director; and any Contract pursuant to which Glyko is or may
            become obligated to make any bonus or similar payment (other
               than payments in respect of salary) in excess of $25,000 to any
current or former employee or director;         

          (ii) any Contract which provides for indemnification of any officer,
director, employee or agent;                    

       (iii) any Contract imposing any restriction on the right or ability
             of Glyko (A) to compete with any other Person, (B) to acquire
         any product or other asset or any services from any other
       Person, (C) to solicit, hire or retain any Person as an
               employee, consultant or independent contractor, (D) to develop,
               sell, supply, distribute, offer, support or service any product
            or any technology or other asset to or for any other Person,
       (E) to perform services for any other Person, or (F) to
            transact business or deal in any other manner with any other
Person;                                         

          (iv) any Contract (A) relating to the acquisition, issuance, voting,
               registration, sale or transfer of any securities, (B) providing
              any Person with any pre-emptive right, right of participation,
             right of maintenance or any similar right with respect to any
          securities, or (C) providing Glyko with any right of first
          refusal with respect to, or right to purchase or otherwise
acquire, any securities;                        

(v)  any Contract relating to any currency hedging;       

         (vi) any Contract imposing any confidentiality obligation on Glyko;

       (vii) any Contract (A) to which any Governmental Body is a party or
   under which any Governmental Body has any rights or
         obligations, or (B) directly or indirectly benefiting any
              Governmental Body (including any subcontract or other Contract
        between Glyko and any contractor or subcontractor to any
Governmental Body);                             

     (viii) any Contract requiring that Glyko give any notice or provide
               any information to any Person prior to considering or accepting
         any Acquisition Proposal or similar proposal, or prior to
        entering into any discussions, agreement, arrangement or
        understanding relating to any Acquisition Transaction or
similar transaction;                            

         (ix) any Contract that has a term of more than 60 days and that may
           not be terminated by Glyko (without penalty) within 60 days
    after the delivery of a termination notice by Glyko;

    (x)  any Contract that contemplates or involves the payment or
              delivery of cash or other consideration in an amount or having
              a value in excess of $25,000 in the aggregate, or contemplates
         or involves the performance of services having a value in
excess of $25,000 in the aggregate;             

          (xi) any Contract (not otherwise identified in clauses "(i)" through
            "(x)" of this sentence) that could reasonably be expected to
  have a material effect on the business, condition,
            capitalization, assets, liabilities, operations or financial
               performance of Glyko or to any of the transactions contemplated
by this Agreement; and                          

(xii) any other Contract, if a breach of such Contract could
           reasonably be expected to have a Material Adverse Effect on
Glyko.                                          

"Options" means and includes, in respect of a particular Entity,          
subscriptions, options, calls, warrants and other rights commitments or         
agreements of any character (whether or not currently exercisable) to acquire   
securities of the Entity in question.                                           

"OSC" means the Ontario Securities Commission.                            

"Person" means any individual, Entity or Governmental Body.               

A-45  

DEFM14A
235th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 235th
"Plan of Arrangement" means the plan of arrangement substantially in the  
form and content of Exhibit B annexed hereto and any amendments or variations   
thereto made in accordance with the provisions of this Agreement or made at the 
direction of the Court in the Final Order and which are acceptable to BioMarin  
and Glyko.                                                                      

  "Registrar" means the Registrar of Companies or other duly authorized person
performing the duties as registrar under the BC Act.                            

"Representatives" means officers, directors, employees, agents, attorneys,
auditors, advisors and representatives.                                         

 "Required BioMarin Stockholder Vote" means the affirmative vote of at least
a majority of the votes cast by holders of the outstanding BioMarin Common      
Stock voting on the resolution to approve the Arrangement including, without    
limitation, the issuance of the BioMarin Common Stock in connection with the    
Arrangement.                                                                    

"Required Glyko Shareholder Vote" means the affirmative vote of at least  
66 2/3 percent of the votes cast by holders of the outstanding Glyko Common     
Shares voting on the Continuance Resolution and the Arrangement Resolution.     

"Return" means any return (including any information return), report,     
statement, declaration, estimate, schedule, notice, notification, form,         
election, certificate or other document or information filed with or submitted  
to, or required to be filed with or submitted to, any Governmental Body in      
connection with the determination, assessment, collection or payment of any Tax 
or in connection with the administration, implementation or enforcement of or   
compliance with any Legal Requirement relating to any Tax.                      

"SEC" means the United States Securities and Exchange Commission.         

 "Securities Exemption Orders" means discretionary orders of the Commissions
exempting the trades contemplated by the Plan of Arrangement from the           
registration and prospectus requirements of applicable Canadian Securities      
Legislation, including, but not limited to, the distribution of BioMarin Common 
Stock, the distribution of any securities upon the conversion or exchange of    
such securities in accordance with their terms (including in connection with    
the replacement of the Glyko Stock Options), or the resale by holders of any    
securities distributed to them pursuant to the Arrangement or upon the          
conversion or exercise of any security issued to them pursuant to the Plan of   
Arrangement, including, but not limited to, the resale of BioMarin Common Stock.

"Stock Option Plan" means the 1994 Glyko stock option plan, as amended.   

"Subsidiary" shall mean, with respect to any non-natural Person, any other
non-natural Person in which such non-natural Person then owns directly or       
indirectly shares of capital stock possessing 50% or more of the total combined 
voting power of all classes of stock of such other non-natural Person.          

"Superior Offer" means an unsolicited, bona fide written offer made by a  
third party (other than BioMarin or its affiliates) which, if consummated,      
would result in such third party acquiring, directly or indirectly, securities  
representing more than 50 percent of the voting power of the shares of Glyko or 
the resulting Entity of such transaction or all or substantially all of the     
assets of Glyko, in each case on terms which the Board of Directors of Glyko    
reasonably determines (following receipt of advice of its financial advisors of 
nationally recognized reputation and outside counsel) to be more favourable to  
Glyko's shareholders than the terms of the Arrangement.                         

  "Tax" or "Taxes" refers to any and all federal, provincial, regional, state,
municipal, local and foreign taxes, assessments and other governmental charges, 
tariffs, duties (including customs duties), levies, assessments, deficiencies,  
fees, impositions and liabilities relating to taxes, including taxes based upon 
or measured by gross                                                            

A-46  

DEFM14A
236th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 236th
receipts, income, capital gains, profits, sales, use and occupation, and value  
added, ad valorem, transfer, surtax, stamp, transfer, property, franchise,      
withholding, payroll, recapture, employment, excise, goods and services, health 
insurance, use, business, workers' compensation and property taxes and any      
related charge or amount (including any fine, penalty or interest), imposed,    
assessed or collected by or under the authority of any Governmental Body and    
any obligations under any agreements or arrangements with any other Person with 
respect to such amounts and including any liability for taxes of a predecessor  
Entity.                                                                         

"TSE" means the Toronto Stock Exchange.                                   

"U.S. Dollar Equivalent" has the meaning ascribed thereto in the Plan of  
Arrangement.                                                                    

"U.S. GAAP" means United States generally accepted accounting principles. 

 "United States 1933 Act" means the United States Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.        

 "United States 1934 Act" means the United States Securities Exchange Act of
1934, as amended, together with the rules and regulations promulgated           
thereunder.                                                                     

 "United States Code" means the United States Internal Revenue Code of 1986,
as amended, together with the rules and regulations promulgated thereunder.     

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be   
executed by their duly authorized respective officers as of the date first      
written above.                                                                  

                                  BIOMARIN PHARMACEUTICAL INC.

                                      By:    /s/  CHRISTOPHER M. STARR

                                        Name:  Christopher M. Starr, Ph.D.

                                   Title: Senior Vice President,
                                            Research and Development

                                        BIOMARIN ACQUISITION (NOVA SCOTIA)
                 COMPANY

                                      By:    /s/  CHRISTOPHER M. STARR

                                        Name:  Christopher M. Starr, Ph.D.

                      Title: President

                           GLYKO BIOMEDICAL LTD.

                              By:    /s/  JOERG GRUBER

                         Name:  Joerg Gruber

                     Title: Chairman

A-47  

DEFM14A
237th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 237th
ANNEX A-1 
AMENDING AGREEMENT  

This AMENDING AGREEMENT (this "Agreement") is made and entered into as of 
May 16, 2002, among BIOMARIN PHARMACEUTICAL INC. ("BioMarin"), a corporation    
existing under the laws of Delaware, BIOMARIN ACQUISITION (NOVA SCOTIA)         
COMPANY, an unlimited liability company existing under the Companies Act (Nova  
Scotia) and a wholly owned Subsidiary of BioMarin ("BioMarin Nova Scotia") and  
GLYKO BIOMEDICAL LTD., a corporation existing under the laws of Canada          
("Glyko").                                                                      

RECITALS  

A.  BioMarin, BioMarin Nova Scotia and Glyko have entered into an         
Acquisition Agreement for a Plan of Arrangement (the "Acquisition Agreement")   
dated February 6, 2002.                                                         

B.  The parties desire to amend certain terms of the Acquisition Agreement
as set forth herein.                                                            

 C.  Capitalized terms used herein, if not otherwise defined, shall have the
meanings given to them in the Acquisition Agreement.                            

NOW, THEREFORE, in consideration of the covenants, promises and           
representations set forth herein, and for other good and valuable               
consideration, the receipt and sufficiency of which are hereby acknowledged,    
the parties agree that the Acquisition Agreement shall be amended as follows:   

AMENDMENT 

1.1  The reference to May 31, 2002 in Section 5.2(a) of the Acquisition   
Agreement shall be amended to refer to August 23, 2002 such that Section 5.2(a) 
shall read as follows:                                                          

"5.2  Meeting of Glyko Shareholders                                       

   (a) Promptly after the date hereof, Glyko will take all action pursuant
to the requirements of the CBCA, the Interim Order, Canadian Securities   
Legislation (and all other applicable securities laws), the TSE and Glyko 
Charter Documents to convene the Glyko Shareholders Meeting to be held as 
promptly as practicable, and in any event Glyko will use its commercially 
reasonable efforts to convene such meeting not later than August 23, 2002 
for the purpose of voting upon the Continuance and the Arrangement. Glyko 
shall ensure that the Glyko Shareholders Meeting is called, noticed,      
convened, held and conducted, and that all proxies solicited in connection
with the Glyko Shareholders Meeting are solicited, in compliance with all 
  applicable Legal Requirements (including the Interim Order and Glyko Charter
  Documents). Glyko's obligation to call, give notice of, convene and hold the
 Glyko Shareholders Meeting in accordance with this Section 5.2(a) shall not
be limited or otherwise affected by the commencement, disclosure,         
announcement or submission of any Superior Offer or other Acquisition     
Proposal. Subject to any withheld, withdrawn, amended or modified         
recommendation of the Glyko Board of Directors in accordance with Section 
5.2(c), Glyko will use its commercially reasonable efforts to solicit from
its shareholders proxies in favor of the approval of the Arrangement.     
 Notwithstanding anything to the contrary contained in this Agreement, Glyko
may adjourn or postpone the Glyko Shareholders Meeting to the extent      
 necessary to ensure that any necessary supplement or amendment to the Joint
Proxy Circular is provided to Glyko's shareholders in advance of a vote on
  the Continuance or the Arrangement or, if as of the time for which the Glyko
Shareholders Meeting is originally scheduled (as set forth in the Joint   
Proxy Circular) there are insufficient Glyko Common Shares represented    
(either in Person or by proxy) to constitute a quorum necessary to conduct
the business of the Glyko Shareholders Meeting."                          

A-1-1 

DEFM14A
238th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 238th
1.2  The reference to May 31, 2002 in Section 5.3 of the Acquisition      
Agreement shall be amended to refer to August 23, 2002 such that Section 5.3    
shall read as follows:                                                          

"5.3  Meeting of BioMarin Stockholders.  Promptly after the date hereof,  
BioMarin will take all action pursuant to the requirements of the Delaware      
General Corporation Law, the United States 1933 Act, the United States 1934 Act 
(and all other applicable securities laws), Nasdaq, SWX Swiss Exchange and      
BioMarin Charter Documents to convene the BioMarin Stockholders Meeting to be   
held as promptly as practicable, and in any event BioMarin will use its         
commercially reasonable efforts to convene such meeting not later than August   
23, 2002 for the purpose of considering the approval of the Arrangement         
including, without limitation, the issuance of the BioMarin Common Stock in     
connection with the Arrangement."                                               

1.3  The reference to June 15, 2002 in Section 8.1(b) of the Acquisition  
Agreement shall be amended to refer to August 30, 2002 such that Section 8.1(b) 
shall read as follows:                                                          

"8.1  Termination                                                         

  (b) by either Glyko or BioMarin if the Arrangement shall not have been
consummated by August 30, 2002 for any reason; provided, however, that the
right to terminate this Agreement under this Section 8.1(b) shall not be  
available to any party whose action or failure to act has been a principal
  cause of or resulted in the failure of the Arrangement to occur on or before
such date and such action or failure to act constitutes a breach of this  
Agreement;"                                                               

1.5  All terms and conditions of the Acquisition Agreement, as amended as 
set forth herein, shall remain in full force and effect.                        

GENERAL PROVISIONS  

2.1  Counterparts.  This Agreement may be executed in one or more         
counterparts, all of which shall be considered one and the same agreement and   
shall become effective when one or more counterparts have been signed by each   
of the parties and delivered to the other party, it being understood that all   
parties need not sign the same counterpart.                                     

2.2  Severability.  In the event that any provision of this Agreement, or 
the application thereof, becomes or is declared by a court of competent         
jurisdiction to be illegal, void or unenforceable, the remainder of this        
Agreement will continue in full force and effect and the application of such    
provision to other Persons or circumstances will be interpreted so as           
reasonably to effect the intent of the parties hereto. The parties further      
agree to replace such void or unenforceable provision of this Agreement with a  
valid and enforceable provision that will achieve, to the extent possible, the  
economic, business and other purposes of such void or unenforceable provision.  

2.3  Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the state of Delaware, regardless of the laws that 
might otherwise govern under applicable principles of conflicts of laws         
thereof. In any action between the parties arising out of or relating to this   
Agreement or any of the transactions contemplated by this Agreement: (a) each   
of the parties irrevocably and unconditionally consents and submits to the      
non-exclusive jurisdiction and venue of the state and federal courts located in 
the state of California; (b) if any such action is commenced in a state court,  
then, subject to applicable law, no party shall object to the removal of such   
action to any federal court located in the Northern District of California; (c) 
each of the parties hereby waives, and agrees not to assert in any such action, 
any claim that it is not personally subject to the jurisdiction of such court,  
that the action is brought in an inconvenient forum or that the venue of the    
action is improper; and (d) each of the parties irrevocably consents to service 
of process by first class certified mail, return receipt requested, postage     
prepaid, to the address at which such party is to receive notice in accordance  
with Section 9.2 of the Acquisition Agreement.                                  

A-1-2 

DEFM14A
239th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 239th
2.4  Rules of Construction.  The parties hereto agree that they have been 
represented by counsel during the negotiation and execution of this Agreement   
and, therefore, waive the application of any law, regulation, holding or rule   
of construction providing that ambiguities in an agreement or other document    
will be construed against the party drafting such agreement or document.        

2.5  Assignment.  This Agreement shall be binding upon, and shall be      
enforceable by and inure solely to the benefit of, the parties hereto and their 
respective successors and assigns; provided, however, that (i) neither this     
Agreement nor any of Glyko's rights hereunder may be assigned by Glyko without  
the prior written consent of BioMarin and (ii) neither this Agreement nor any   
of BioMarin's or BioMarin Nova Scotia's rights hereunder may be assigned by     
BioMarin or BioMarin Nova Scotia without the prior written consent of Glyko     
(other than an assignment to a direct or indirect wholly-owned Subsidiary of    
BioMarin provided that such assignment shall not release BioMarin from          
liability hereunder), and any attempted assignment of this Agreement or any of  
such rights by Glyko or BioMarin and BioMarin Nova Scotia, as the case may be,  
without such consent or except as provided for herein shall be void and of no   
effect.                                                                         

  2.6  WAIVER OF JURY TRIAL.  EACH OF BIOMARIN, BIOMARIN NOVA SCOTIA AND GLYKO
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING  
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF   
OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF BIOMARIN, BIOMARIN NOVA SCOTIA  
AND GLYKO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT       
HEREOF.                                                                         

2.7  Attorneys' Fees.  In any action at law or suit in equity to enforce  
this Agreement or the rights of any of the parties hereunder commenced or       
initiated after the Effective Date, the prevailing party in such action or suit 
shall be entitled to receive a reasonable sum for its attorneys' fees and all   
other reasonable costs and expenses incurred in such action or suit.            

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be   
executed by their duly authorized respective officers as of the date first      
written above.                                                                  

                                  BIOMARIN PHARMACEUTICAL INC.

                                      By:    /S/  CHRISTOPHER M. STARR

                                        Name:  Christopher M. Starr, Ph.D.

                      Title: Secretary

                                        BIOMARIN ACQUISITION (NOVA SCOTIA)
             COMPANY

                                      By:    /S/  CHRISTOPHER M. STARR

                                        Name:  Christopher M. Starr, Ph.D.

                      Title: President

                           GLYKO BIOMEDICAL LTD.

                              By:    /S/  JOERG GRUBER

                         Name:  Joerg Gruber

                     Title: Chairman

A-1-3 

DEFM14A
240th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 240th
ANNEX B 

FORM OF 
PLAN OF ARRANGEMENT UNDER SECTION 192 
OF THE CANADA BUSINESS CORPORATIONS ACT 

ARTICLE 1 
DEFINITIONS AND INTERPRETATION  

 Section 1.01  Definitions.  In this Plan of Arrangement the following words
and phrases shall have the meanings hereinafter set forth:                      

(a) "Act" means the Canada Business Corporations Act, including the   
        regulations made thereunder, as now in effect and as it may be amended
from time to time;                                            

   (b) "Acquisition Agreement" means the Acquisition Agreement for a Plan of
   Arrangement by and among BioMarin, BioMarin Nova Scotia and Glyko
        dated as of February 6, 2002, as the same may be amended, supplemented
and/or restated from time to time;                            

   (c) "Arrangement" means the arrangement contemplated herein to be made on
        the terms set out in this Plan subject to any amendments or variations
   thereto made in accordance with the Acquisition Agreement and the
        terms hereof or made at the direction of the Court in the Final Order;

 (d) "Arrangement Resolution" means the special resolution in respect of
the Arrangement to be considered and approved by Glyko Common 
 Shareholders at the Meeting to be substantially in the form and
content of Exhibit A annexed to the Acquisition Agreement;    

  (e) "Articles of Arrangement" means the articles of arrangement of Glyko
       in respect of the Arrangement that are required by the Act to be sent
to the Director after the Final Order is made;                

    (f) "BioMarin" means BioMarin Pharmaceutical Inc., a Delaware corporation;

(g) "BioMarin Common Stock" means the shares of common stock par value
U.S.$0.001 per share of BioMarin as currently constituted;    

(h) "BioMarin Nova Scotia" means BioMarin Acquisition (Nova Scotia)   
Company, an unlimited liability company incorporated under the
Companies Act (Nova Scotia);                                  

 (i) "BioMarin Average Trading Price" means the average closing price of
 shares of BioMarin Common Stock on Nasdaq during a period of 20
       consecutive trading days ending on the second trading day immediately
preceding the Effective Date;                                 

(j) "Board of Directors" means the board of directors of Glyko;       

   (k) "Business Day" means any day other than a Saturday, a Sunday or a day
when banks are not open for business in either San Francisco, 
California or Toronto, Ontario;                               

   (l) "Canadian Dollar Equivalent" means, in respect of an amount expressed
  in a currency other than Canadian dollars (the "Foreign Currency
  Amount") at any date the product obtained by multiplying (a) the
    Foreign Currency Amount by (b) the noon spot exchange rate on such
 date for such foreign currency expressed in Canadian dollars as
      reported by the Bank of Canada or, if such spot exchange rate is not
      available, such exchange rate on such date for such foreign currency
expressed in Canadian dollars as may be deemed by the Board of
Directors to be appropriate for such purpose;                 

(m) "Certificate of Arrangement" means the certificate of arrangement 
     endorsed upon the Articles of Arrangement of Glyko by the Director;

    (n) "Circular" means the notice of the Meeting and accompanying management
        information circular, including the schedules attached thereto and all
       amendments from time to time made thereto, to be sent to Glyko Common
Shareholders in connection with the Meeting;                  

B-1 

DEFM14A
241st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 241st
 (o) "Continuance Resolution" means the special resolution in respect of
   the continuance of Glyko under the laws of British Columbia to be
      considered and approved by Glyko Common Shareholders at the Meeting;

(p) "Court" means the Supreme Court of Ontario;                       

   (q) "Depositary" means Computershare Trust Company at its offices located
in Toronto, Ontario;                                          

    (r) "Director" means the Director appointed pursuant to Section 260 of the
Act;                                                          

 (s) "Dissent Rights" shall have the meaning ascribed thereto in Section
3.01;                                                         

    (t) "Dissenting Shareholder" means a Glyko Common Shareholder who dissents
        in respect of the Arrangement Resolution in strict compliance with the
Dissent Rights;                                               

  (u) "Dissenting Shares" means the shares of any Glyko Common Shareholder
        who has demanded and perfected Dissent Rights in respect of such Glyko
    Common Shares in accordance with the Interim Order and the Act and
      who, as of the Effective Time, has not effectively withdrawn or lost
such Dissent Rights;                                          

(v) "Effective Date" means the date of the Certificate of Arrangement;

     (w) "Effective Time" means 12:01 a.m. (Eastern time) on the Effective Date;

(x) "Exchange Ratio" means 0.3309, subject to adjustment in accordance
with Section 2.03;                                            

(y) "Final Order" means the final order of the Court approving the    
   Arrangement as such order may be amended by the Court at any time
       prior to the Effective Date or, if appealed, then, unless such appeal
is withdrawn or denied, such order as affirmed;               

   (z) "Glyko" means Glyko Biomedical Ltd., a corporation incorporated under
the Act;                                                      

(aa) "Glyko Common Shareholders" means the registered holders of Glyko  
Common Shares;                                                

  (bb) "Glyko Common Shares" means the common shares in the capital of Glyko
as constituted immediately prior to the Implementation Time;  

 (cc) "Glyko Options" means all unexpired options to purchase Glyko Common
  Shares outstanding immediately prior to the Implementation Time;

(dd) "Governmental Body" means any: (a) nation, state, commonwealth,    
province, territory, county, municipality, district or other  
    jurisdiction of any nature; (b) federal, state, provincial, local,
municipal, foreign or other government; or (c) governmental,  
     quasi-governmental or regulatory authority of any nature (including
any governmental division, department, agency, commission,    
instrumentality, official, ministry, fund, foundation, centre,
 organization, unit, body or other person and any court or other
tribunal);                                                    

   (ee) "Implementation Time" means 12:01 a.m. (Pacific time) on the date that
       is the earlier of (a) the date that Glyko is continued under the laws
     of British Columbia, (b) the date upon which the Board of Directors
       resolves to implement the Arrangement, which in no event may be prior
     to the Effective Date or (c) the date that is 10 days following the
Effective Date;                                               

  (ff) "Interim Order" means the interim order of the Court, as the same may
be amended, in respect of the Arrangement;                    

(gg) "Letter of Transmittal" means the Letter of Transmittal for use by 
   Glyko Common Shareholders, in the form accompanying the Circular;

  (hh) "Meeting" means the special meeting of Glyko Common Shareholders, and
       all adjournments and postponements thereof, called and held to, among
       other things, consider and approve the Continuance Resolution and the
Arrangement Resolution;                                       

B-2 

DEFM14A
242nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 242nd
(ii) "Nasdaq" means the Nasdaq National Market;                         

   (jj) "person" means and includes any individual, corporation (including any
    non-profit corporation), general partnership, limited partnership,
      limited liability partnership, joint venture, estate, trust, company
        (including any company limited by shares, limited liability company or
       joint stock company), firm, society or other enterprise, association,
organization, or Governmental Body;                           

(kk) "Replacement Option" shall have the meaning ascribed thereto in    
Section 2.02(c);                                              

 (ll) "this Plan," "Plan of Arrangement," "hereof," "herein," "hereto" and
 like references mean and refer to this plan of arrangement; and

 (mm) "U.S. Dollar Equivalent" means, in respect of an amount expressed in
        Canadian dollars at any date, the product obtained by multiplying: (a)
       the number of Canadian dollars, by (b) the noon spot exchange rate on
        such date for such Canadian dollars expressed in United States dollars
     as reported by the Bank of Canada or, if such spot exchange rate is
     not available, such exchange rate on such date for Canadian dollars
     expressed in United States dollars as may be deemed by the Board of
Directors to be appropriate for such purpose.                 

  Words and phrases used herein that are defined in the Act or the Acquisition
Agreement and not defined herein shall have the same meaning herein as in the   
Act or the Acquisition Agreement, as applicable, unless the context otherwise   
requires.                                                                       

  Section 1.02  Interpretation Not Affected By Headings, etc.  The division of
this Plan into articles and sections and the insertion of headings are for      
convenience of reference only and shall not affect the construction or          
interpretation hereof.                                                          

 Section 1.03  Gender and Number.  Unless the context requires the contrary,
words importing the singular only shall include the plural and vice versa and   
words importing the use of any gender shall include all genders.                

 Section 1.04  Date for Any Action.  In the event that the date on which any
action is required to be taken hereunder by any of the parties is not a         
Business Day, such action shall be required to be taken on the next succeeding  
day which is a Business Day.                                                    

 Section 1.05  Governing Law.  This Plan of Arrangement shall be governed by
and construed in accordance with the laws of the Province of Ontario and the    
federal laws of Canada applicable therein.                                      

ARTICLE 2 
ARRANGEMENT 

Section 2.01  Binding Effect.  This Plan of Arrangement will become       
effective at, and be binding at and after, the Effective Time on (i) BioMarin,  
(ii) BioMarin Nova Scotia, (iii) Glyko, (iv) all Glyko Common Shareholders, and 
(v) all holders of Glyko Options.                                               

Section 2.02  Arrangement.  Beginning at the Implementation Time, the     
following events or transactions shall occur and shall be deemed to occur in    
the following sequence without any further act or formality:                    

 (a) each Glyko Common Share issued and outstanding immediately prior to the
Implementation Time, other than any Dissenting Shares, will be    
  automatically exchanged, subject to the provisions hereof, such that
     such Glyko Common Shares will be transferred to BioMarin Nova Scotia in
     exchange for the delivery by BioMarin Nova Scotia to the former holders
of such Glyko Common Shares of that portion of a share of BioMarin
Common Stock equal to the Exchange Ratio and each Glyko Common    

B-3 

DEFM14A
243rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 243rd
   Shareholder shall cease to be a holder of Glyko Common Shares and the
  name of each such holder shall be removed from the register of Glyko
  Common Shareholders and added to the register of holders of BioMarin
 Common Stock (whereupon there shall be no Glyko Common Shareholders
other than BioMarin Nova Scotia);                                 

(b) in the event of an entitlement to receive a fraction of a share of    
      BioMarin Common Stock, such holder shall have the rights provided for in
Section 4.06; and                                                 

(c) each Glyko Option shall be exchanged for an option (a "Replacement    
    Option") to purchase a number of shares of BioMarin Common Stock equal
 to the product of the Exchange Ratio and the number of Glyko Common
   Shares issuable pursuant to such Glyko Option, whether exercisable or
  unexercisable, immediately prior to the Implementation Time, rounded
      down to the nearest whole number of shares. Such Replacement Option will
    provide for an exercise price per share of BioMarin Common Stock equal
to the U.S. Dollar Equivalent (calculated on the date of the      
Implementation Time) of the per share exercise price of such Glyko
   Option divided by the Exchange Ratio, rounded up to the nearest whole
     cent. The term and vesting schedule of such Replacement Option shall be
  equivalent to those of the Glyko Option it replaces, except for such
changes as are triggered by the entry by Glyko into this Plan of  
Arrangement. In such case any document or agreement evidencing a  
replaced Glyko Option shall be terminated.                        

Subject to Section 2.03, the maximum number of shares of BioMarin Common  
Stock issuable in connection with the exchange of Glyko Common Shares for       
BioMarin Common Stock shall be 11,367,617 and, if the number of Glyko Common    
Shares outstanding at the Implementation Time would result in a greater number  
of shares of BioMarin Common Stock being issuable, then the Exchange Ratio      
shall be adjusted accordingly.                                                  

Section 2.03  Adjustment to Exchange Ratio.  The Exchange Ratio shall be  
adjusted to reflect appropriately the effect of any stock split, reverse stock  
split, stock dividend (including any dividend or distribution of securities     
convertible into BioMarin Common Stock or Glyko Common Shares), cash dividends, 
reorganization, recapitalization, combination, exchange of shares or other like 
change with respect to BioMarin Common Stock or Glyko Common Shares occurring   
after the date of the Acquisition Agreement and prior to the Implementation     
Time.                                                                           

ARTICLE 3 
RIGHTS OF DISSENT 

Section 3.01  Rights of Dissent.  Glyko Common Shareholders may in        
connection with the Arrangement exercise rights of dissent with respect to such 
shares pursuant to and in the manner set forth in Section 190 of the Act as the 
same may be modified by the Interim Order or the Final Order (the "Dissent      
Rights"). Glyko Common Shareholders who duly exercise such Dissent Rights and   
who:                                                                            

  (a) are ultimately determined to be entitled to be paid fair value for their
Glyko Common Shares shall be deemed to have transferred such Glyko
      Common Shares to Glyko without any further act or formality and free and
    clear of all liens and encumbrances and such shares shall be cancelled
at the Implementation Time; or                                    

  (b) are ultimately determined not to be entitled, for any reason, to be paid
fair value for their Glyko Common Shares shall be deemed to have  
   participated in the Arrangement on the same basis as a non-dissenting
      holder of Glyko Common Shares and shall receive BioMarin Common Stock on
the basis determined in accordance with Section 2.02(a),          

     but in no case shall BioMarin, BioMarin Nova Scotia, Glyko or any other
 person be required to recognize such holders as Glyko Common Shares
   after the Implementation Time, and the names of such holders of Glyko
  Common Shareholders shall be deleted from the register of holders of
    Glyko Common Shares at the Implementation Time. Any Glyko Shareholders
      who duly exercise Dissent Rights and who are ultimately determined to be
     paid fair value for their Glyko Common Shares shall be paid solely from
the assets of Glyko.                                              

B-4 

DEFM14A
244th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 244th
ARTICLE 4 
CERTIFICATE AND FRACTIONAL SHARES 

Section 4.01  Issuance of Certificates Representing Shares of BioMarin    
Common Stock.  Promptly after the Implementation Time, BioMarin shall cause     
BioMarin Nova Scotia to make available to the Depositary, for exchange in       
accordance with Article 2, the BioMarin Common Stock issuable in accordance     
with the terms of the Arrangement and cash in an amount sufficient for payment  
in lieu of fractional shares also in accordance with the terms of the           
Arrangement. Upon surrender to the Depositary for cancellation of a certificate 
which immediately prior to the Implementation Time represented Glyko Common     
Shares, together with such other documents and instruments as would have been   
required to effect the transfer of the shares formerly represented by such      
certificate under the Act and the by-laws of Glyko and such additional          
documents and instruments as Glyko, BioMarin Nova Scotia and the Depositary may 
reasonably require, the holder of such surrendered certificate shall be         
entitled to receive in exchange therefor, and the Depositary shall forthwith    
deliver to such holder, a certificate representing that number (rounded down to 
the nearest whole number) of shares of BioMarin Common Stock which such holder  
has the right to receive (together with any dividends or distributions with     
respect thereto pursuant to Section 4.05 and any cash in lieu of fractional     
shares of BioMarin Common Stock pursuant to Section 4.06, less any amounts      
withheld pursuant to Section 5.01), and any certificate so surrendered shall    
forthwith be cancelled. In the event of a transfer of ownership of Glyko Common 
Shares prior to the Implementation Time that is not registered in the transfer  
records of Glyko, a certificate representing the proper number of shares of     
BioMarin Common Stock may be issued to the transferee if the certificate        
representing such Glyko Common Shares is presented to the Depositary,           
accompanied by all documents required to evidence and effect such transfer.     
Until surrendered as contemplated by this Section 4.01, each certificate which  
immediately prior to the Implementation Time represented Glyko Common Shares    
that were exchanged for shares of BioMarin Common Stock shall be deemed at all  
times after the Implementation Time to represent only the right to receive upon 
such surrender (i) the certificate representing shares of BioMarin Common Stock 
as contemplated by this Section 4.01, (ii) a cash payment in lieu of any        
fractional BioMarin Common Stock as contemplated by Section 4.06 and (iii) any  
dividends or distributions with a record date after the Implementation Time     
theretofore paid or payable with respect to BioMarin Common Stock as            
contemplated by Section 4.05.                                                   

  Section 4.02  Delivery of Letter of Transmittal.  At the time of mailing the
Circular or as soon as practicable after the Effective Date, Glyko shall        
forward to each Glyko Common Shareholder at the address of such holder as it    
appears on the register maintained by or on behalf of Glyko in respect of the   
holders of Glyko Common Shares, a copy of the Letter of Transmittal and         
instructions for obtaining delivery of the BioMarin Common Stock issuable and   
payable to such holders pursuant to the Plan.                                   

 Section 4.03  Expiration of Rights.  Any certificates formerly representing
Glyko Common Shares that, following the Effective Date, are not deposited with  
the Depositary, together with a duly executed Letter of Transmittal, and such   
other documents as the Depositary deems necessary, on or before the sixth       
anniversary of the Effective Date, shall cease to represent a right or claim of 
any kind or nature and the right of the holder of such securities to receive    
BioMarin Common Stock as provided for in the Acquisition Agreement, shall be    
deemed to be surrendered to BioMarin Nova Scotia together with all dividends or 
distributions thereon held for such holder, for no consideration, and such      
BioMarin Common Stock shall thereupon be cancelled and the name of the former   
registered holder shall be removed from the register of holders of BioMarin     
Common Stock.                                                                   

Section 4.04  Entitlement to Options.  As soon as practicable after the   
Effective Date, the holders of outstanding Glyko Options shall be provided with 
documentation evidencing Replacement Options in accordance with the provisions  
of Section 2.02(c).                                                             

 Section 4.05  Distributions with Respect to Unsurrendered Certificates.  No
dividends or other distributions declared or made after the Effective Date with 
respect to BioMarin Common Stock with a record date after the Effective Date    
shall be paid to the holder of any unsurrendered certificate which immediately  
prior to the Effective Date represented outstanding Glyko Common Shares that    
were exchanged for BioMarin                                                     

B-5 

DEFM14A
245th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 245th
Common Stock pursuant to the procedures set out in Article 2, and no cash       
payment in lieu of fractional shares shall be paid to any such holder pursuant  
to Section 4.06, unless and until the holder of record of such certificate      
shall surrender such certificate in accordance with Section 4.01. Subject to    
applicable law, at the time of such surrender of any such certificate (or, in   
the case of clause (iii) below, at the appropriate payment date), there shall   
be paid to the record holder of the certificates representing whole shares of   
BioMarin Common Stock, without interest (i) the amount of any cash payable in   
lieu of a fractional BioMarin Common Share to which such holder is entitled     
pursuant to Section 4.06, (ii) the amount of dividends or other distributions   
with a record date after the Effective Date theretofore paid with respect to    
such BioMarin Common Stock, and (iii) on the appropriate payment date, the      
amount of dividends or other distributions with a record date after the         
Effective Date but prior to surrender and a payment date subsequent to          
surrender payable with respect to such BioMarin Common Stock.                   

Section 4.06  No Fractional Shares.  No fraction of a share of BioMarin   
Common Stock shall be issued by virtue of the Arrangement, no dividend, stock   
split or other change in the capital structure of BioMarin shall relate to any  
such fraction and any fractional interests shall not entitle the owner thereof  
to vote or to exercise any rights as a security holder of BioMarin. In lieu     
thereof, each Glyko Common Shareholder who would otherwise be entitled to a     
fraction of a share of BioMarin Common Stock (after aggregating all fractional  
shares of BioMarin Common Stock that would otherwise be received by such        
holder) shall, upon surrender of such holder's certificate(s) representing      
Glyko Common Shares receive from BioMarin Nova Scotia an amount of cash         
(rounded to the nearest whole cent), without interest, equal to the product     
(or, at the option of BioMarin Nova Scotia, the Canadian Dollar Equivalent of   
the product) of such fraction and the BioMarin Average Trading Price.           

Section 4.07  Lost Certificates.  In the event any certificate which      
immediately prior to the Implementation Time represented outstanding Glyko      
Common Shares that were exchanged pursuant to Section 2.02 shall have been      
lost, stolen or destroyed, upon the making of an affidavit of that fact by the  
person claiming such certificate to be lost, stolen or destroyed, the           
Depositary will issue in exchange for such lost, stolen or destroyed            
certificate, certificates representing shares of BioMarin Common Stock (and any 
dividends or distributions with respect thereto and any cash pursuant to        
Section 4.05) deliverable in respect thereof as determined in accordance with   
Section 2.02. When seeking such issuance and/or payment in exchange for any     
lost, stolen or destroyed certificate, the person to whom certificates          
representing shares of BioMarin Common Stock are to be issued shall, at the     
discretion of BioMarin Nova Scotia and Glyko, as a condition precedent to the   
issuance thereof, give a bond satisfactory to BioMarin Nova Scotia and Glyko,   
in such sum as BioMarin Nova Scotia and Glyko may reasonably direct as          
indemnity against any claim that may be made against BioMarin Nova Scotia or    
Glyko or the Depositary with respect to the certificate alleged to have been    
lost, stolen or destroyed.                                                      

ARTICLE 5 
WITHHOLDING RIGHTS  

Section 5.01  Withholding Rights.  Each of Glyko, BioMarin Nova Scotia and
the Depositary shall be entitled to deduct and withhold from the consideration  
payable or otherwise deliverable pursuant to this Arrangement to any holder or  
former holder of Glyko Common Shares such amount as may be required by law (as  
advised by outside tax counsel for BioMarin) to be deducted or withheld         
therefrom under the United States Code or under any provision of United States  
or Canadian federal, state, provincial, regional, local or foreign tax law,     
including the Income Tax Act (Canada), or under any other applicable legal      
requirement. To the extent that amounts are so deducted or withheld, such       
amounts shall be treated for all purposes hereof as having been paid to the     
holder of the shares in respect of which such deduction and withholding was     
made, provided that such amounts are actually remitted to the appropriate       
taxing authority in accordance with applicable law and that such holder has     
been provided forthwith with a receipt evidencing such remittance. BioMarin,    
BioMarin Nova Scotia, Glyko and the Depositary are hereby authorized to sell or 
otherwise dispose of such portion of such consideration as is necessary to      
provide sufficient funds to BioMarin, BioMarin Nova Scotia, Glyko or the        
Depositary, as the                                                              

B-6 

DEFM14A
246th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 246th
case may be, net of expenses, in order to enable it to comply with such         
deduction or withholding requirement and BioMarin, BioMarin Nova Scotia, Glyko  
or the Depositary shall give an accounting to the holder with respect thereto   
and any balance of such proceeds of sale.                                       

ARTICLE 6 
AMENDMENTS  

Section 6.01  Amendment of the Arrangement.                               

  (a) Glyko reserves the right to amend, modify and/or supplement this Plan of
  Arrangement at any time and from time to time provided that any such
   amendment, modification, or supplement must be contained in a written
   document which is (i) agreed to by BioMarin and BioMarin Nova Scotia,
    (ii) filed with the Court and, if made following the Meeting, approved
      by the Court and (iii) communicated to holders of Glyko Common Shares in
the manner if and as required by the Court.                       

(b) Any amendment, modification or supplement to this Plan of Arrangement 
may be proposed by Glyko at any time prior to or at the Meeting   
   (provided that BioMarin and BioMarin Nova Scotia shall have consented
      thereto) with or without any other prior notice or communication, and if
  so proposed and accepted by the persons voting at the Meeting (other
    than as may be required under the Interim Order), shall become part of
this Plan of Arrangement for all purposes.                        

(c) Any amendment, modification or supplement to this Plan of Arrangement 
     which is approved by the Court following the Meeting shall be effective
 only (i) if it is consented to by Glyko, (ii) if it is agreed to by
    BioMarin and BioMarin Nova Scotia, and (iii) if required by the Court,
it is consented to by holders of Glyko Common Shares voting in the
manner directed by the Court.                                     

  Any amendment, modification or supplement to this Plan of Arrangement may be
made following the Effective Date by Glyko, provided that (i) it is agreed to   
by BioMarin and BioMarin Nova Scotia and (ii) it concerns a matter which, in    
the reasonable opinion of Glyko, is of an administrative nature required to     
better give effect to the implementation of this Plan of Arrangement and is not 
adverse to the financial or economic interests of the holders of Glyko Common   
Shares or Glyko Options.                                                        

ARTICLE 7 
GENERAL 

  Section 7.01  Further Assurances.  Notwithstanding that the transactions and
events set out herein shall occur and be deemed to occur in the order set out   
in this Plan of Arrangement without any further act or formality, each of the   
parties to the Acquisition Agreement shall make, do and execute, or cause to be 
made, done and executed, all such further acts, deeds, agreements, transfers,   
assurances, instruments or documents as may reasonably be required by any of    
them in order further to document or evidence any of the transactions or events 
set out herein.                                                                 

 Section 7.02  Paramountcy.  From and after the Effective Time (i) this Plan
of Arrangement shall take precedence and priority over any and all Glyko Common 
Shares or Glyko Options issued or granted prior to the Effective Time, (ii) the 
rights and obligations of the Glyko Common Shareholders, the holders of Glyko   
Options and any trustee and transfer agent therefor, shall be solely as         
provided for in this Plan of Arrangement, and (iii) all actions, causes of      
actions, claims or proceedings (actual or contingent, and whether or not        
previously asserted) based on or in any way relating to Glyko Common Shares or  
Glyko Options shall be deemed to have been settled, compromised, released and   
determined without liability except as set forth herein.                        

Section 7.03  Continuance.  Subject to the approval of the Glyko Common   
Shareholders, the Director and the Registrar under the Company Act (British     
Columbia), Glyko shall be continued under the laws of British Columbia as soon  
as is practicable following the Effective Time.                                 

B-7 

DEFM14A
247th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 247th
ANNEX C 

ARRANGEMENT RESOLUTION  

SPECIAL RESOLUTION OF THE SHAREHOLDERS OF 
GLYKO BIOMEDICAL LTD. 

BE IT RESOLVED THAT:                                                            

1.  The arrangement (the "Arrangement") under Section 192 of the Canada   
Business Corporations Act ("CBCA") involving Glyko Biomedical Ltd. ("Glyko"),   
BioMarin Pharmaceutical Inc. ("BioMarin") and BioMarin Acquisition (Nova        
Scotia) Company, as more particularly described and set forth in the Joint      
Proxy Circular of Glyko and BioMarin accompanying the notice of this meeting    
(as the Arrangement may be modified or amended) is hereby authorized, approved  
and adopted.                                                                    

  2.  The plan of arrangement (the "Plan of Arrangement") involving Glyko, the
full text of which is set out as Annex B to the Joint Proxy Circular (as the    
Plan of Arrangement may be or may have been amended) is hereby approved and     
adopted.                                                                        

3.  Notwithstanding that this resolution has been passed (and the         
Arrangement adopted) by the shareholders of Glyko or that the Arrangement has   
been approved by the Superior Court of Justice (Ontario), the directors of      
Glyko are hereby authorized (i) to amend the acquisition agreement made as of   
February 6, 2002 among Glyko, BioMarin and BioMarin Nova Scotia (the            
"Acquisition Agreement"), to the extent permitted in the Acquisition Agreement  
and to amend the Plan of Arrangement to the extent permitted in the Plan of     
Arrangement and/or (ii) not to proceed with the Arrangement without further     
approval of the shareholders of Glyko, but only if the Acquisition Agreement is 
terminated in accordance with Article 8 thereof.                                

4.  Any officer or director of Glyko is hereby authorized and directed for
and on behalf of Glyko to execute, under the seal of Glyko or otherwise, and to 
deliver articles of arrangement and such other documents as are necessary or    
desirable to the Director under the CBCA in order to give effect to the         
foregoing resolution.                                                           

5.  Any officer or director of Glyko is hereby authorized and directed for
and on behalf of Glyko to execute or cause to be executed, under the seal of    
Glyko or otherwise, and to deliver or cause to be delivered, all such other     
documents and instruments and to perform or cause to be performed all such      
other acts and things as in such person's opinion may be necessary or desirable 
to give full effect to the foregoing resolution and the matters authorized      
thereby, such determination to be conclusively evidenced by the execution and   
delivery of such document, agreement or instrument or the doing of any such act 
or thing.                                                                       

C-1 

DEFM14A
248th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 248th
ANNEX D 

CONTINUANCE RESOLUTION  

SPECIAL RESOLUTION OF THE SHAREHOLDERS OF 
GLYKO BIOMEDICAL LTD. 

BE IT RESOLVED THAT:                                                            

1.  Glyko Biomedical Ltd. ("Glyko") is hereby authorized to apply to the  
Director under the Canada Business Corporations Act ("CBCA") for the Director's 
consent to the continuance of Glyko under the jurisdiction of British Columbia  
pursuant to Section 36 of the Company Act (British Columbia) ("BCCA").          

2.  Glyko is hereby authorized, pursuant to Section 188 of the CBCA, to   
apply under Section 36 of the BCCA to the Registrar under the BCCA for a        
Certificate of Continuance under the BCCA as more particularly described and    
set forth in the Joint Proxy Circular (the "Circular") of Glyko and BioMarin    
Pharmaceutical Inc. accompanying the notice of this meeting.                    

 3.  Subject to the continuance of Glyko pursuant to Section 36 of the BCCA,
articles of continuance continuing Glyko under the BCCA in substantially the    
form of Glyko's articles of incorporation be approved and adopted with such     
technical amendments, deletions or alterations as may be deemed necessary or    
advisable by any director or officer of Glyko in order to assure compliance     
with the provisions of the BCCA and the requirements of the Registrar           
thereunder.                                                                     

4.  The board of directors of Glyko is hereby authorized to abandon the   
application for continuance at any time without further approval of the Glyko   
shareholders.                                                                   

5.  Any officer or director of Glyko is hereby authorized and directed for
and on behalf of Glyko to execute articles of continuance and to deliver or     
cause to be delivered all such other documents and instruments and to perform   
or cause to be performed all such other acts and things as in such person's     
opinion may be necessary or desirable to give full effect to the foregoing      
resolution and the matters authorized thereby, such determination to be         
conclusively evidenced by the execution and delivery of such document,          
agreement or instrument or the doing of any such act or thing.                  

D-1 

DEFM14A
249th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 249th
ANNEX E 

NOTICE OF APPLICATION AND INTERIM ORDER 

                                                     Court File No: 02-CL-4483

ONTARIO 
SUPERIOR COURT OF JUSTICE-- 
COMMERCIAL LIST 

IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, CHAP. 
C-44, SECTION 192, AS AMENDED                                             

AND IN THE MATTER OF AN APPLICATION BY GLYKO BIOMEDICAL LTD. RELATING TO A
PROPOSED ARRANGEMENT INVOLVING GLYKO BIOMEDICAL LTD. and BIOMARIN         
PHARMACEUTICAL INC.                                                       

AMENDED 
NOTICE OF APPLICATION 

TO THE RESPONDENTS:                                                             

A PROCEEDING HAS BEEN COMMENCED by the applicant. The claim made by the   
applicant appears on the following pages.                                       

THIS APPLICATION will come on for a hearing on Friday, August 16, 2002, at
10:00 a.m., before a judge presiding over the Commercial List at 393 University 
Avenue, 8th Floor, Toronto, Ontario.                                            

  IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the
application or to be served with any documents in the application, you or an    
Ontario lawyer acting for you must forthwith prepare a notice of appearance in  
Form 38A prescribed by the Rules of Civil Procedure, serve it on the            
applicant's lawyer, or where the applicant does not have a lawyer, serve it on  
the applicant, and file it, with proof of service, in this court office, and    
you or your lawyer must appear at the hearing.                                  

 IF YOU WISH TO PRESENT AFFIDAVIT OR OTHER DOCUMENTARY EVIDENCE TO THE COURT
OR TO EXAMINE OR CROSS-EXAMINE WITNESSES ON THE APPLICATION, you or your lawyer 
must, in addition to serving your notice of appearance, serve a copy of the     
evidence on the applicant's lawyer or, where the applicant does not have a      
lawyer, serve it on the applicant, and file it, with proof of service, in the   
court office where the application is to be heard as soon as possible, but at   
least 2 days before the hearing.                                                

 IF YOU FAIL TO APPEAR AT THE HEARING, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE
AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO OPPOSE THIS APPLICATION BUT   
ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A 
LOCAL LEGAL AID OFFICE.                                                         

                                "Registry Officer"
DATE: April 11, 2002 Issued by: ------------------
                                (Registry Officer)

E-1 

DEFM14A
250th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 250th
                            Address of local office:

                          393 University Avenue,
                10/th/ Floor
                    Toronto, Ontario
           M5H 3E5

TO:     ALL HOLDERS OF COMMON SHARES OF                             
GLYKO BIOMEDICAL LTD.                               

AND TO: ALL HOLDERS OF OPTIONS TO PURCHASE COMMON SHARES OF         
GLYKO BIOMEDICAL LTD.                               

AND TO: THE DIRECTOR APPOINTED PURSUANT TO SECTION 260 OF THE CANADA
BUSINESS CORPORATIONS ACT                           

Director General                                    
Corporations Directorate, Industry Canada           
9/th/ Floor, Jean Edmonds Tower South               
365 Laurier Avenue West                             
Ottawa, Ontario K1A 0C8                             

AND TO: CASSELS BROCK & BLACKWELL LLP                               
Barristers & Solicitors                             
Scotia Plaza, Suite 2100                            
40 King St. W.                                      
Toronto, Ontario M5H 3C2                            

Mark T. Bennett                                     
Tel:  (416) 869-5407                                
Fax:  (416) 360-8877                                
Solicitors for BioMarin Pharmaceutical Inc.         
and BioMarin Acquisition (Nova Scotia) Company      

E-2 

DEFM14A
251st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 251st
APPLICATION 

1. The Applicant Glyko Biomedical Ltd. ("Glyko") makes application for:         

(a) An order pursuant to section 192 of the Canada Business Corporations  
    Act, R.S.C. 1985, Chap. C-44, as amended (the "CBCA") approving a Plan
of Arrangement (the "Arrangement") proposed by the Applicant      
      substantially in the form described in the Joint Proxy Circular attached
      as Exhibit "A" to the Affidavit of John A. Kolada to be filed in support
of this Application;                                              

 (b) An interim order (the "Interim Order") for the advice and directions of
      this Court pursuant to subsection 192(4) of the CBCA with respect to the
Arrangement and this Application; and                             

(c) Such further and other relief as this Court may deem just.            

2. The grounds for the Application are:                                         

 (a) All statutory requirements under the CBCA either have been fulfilled or
will be fulfilled by the date of the return of this Application;  

(b) The Arrangement is fair and reasonable and it is appropriate for this 
Court to approve the Arrangement;                                 

(c) Section 192 of the CBCA;                                              

(d) Rules 14.05(2), 17.02, 37 and 38 of the Rules of Civil Procedure; and 

 (e) Such further and other grounds as counsel may advise and this Court may
permit.                                                           

3. The following documentary evidence will be used at the hearing of the        
Application:                                                              

(a) Such Interim Order as may be granted by this Court;                   

 (b) The Affidavit of John A. Kolada, to be sworn, and the exhibits thereto;

(c) Such further affidavits of deponents on behalf of the Applicant,      
     reporting as to the compliance with any Interim Order of this Court and
   as to the result of any meetings ordered by any Interim Order of this
Court; and                                                        

  (d) Such further and other material as counsel may advise and this Court may
permit.                                                           

4. The Notice of Application will be sent to all registered holders of common   
shares of Glyko, at the address of each holder as shown on the books and  
 records of Glyko at the close of business on July 4, 2002, being the record
  date established by Glyko, or as this Court may direct in the Interim Order,
pursuant to rules 17.02(n) and 17.02(o) of the Rules of Civil Procedure in
the case of those holders whose addresses, as they appear on the books and
records of Glyko, are outside Ontario.                                    

DATE: July 2, 2002 BLAKE, CASSELS & GRAYDON LLP 
             Barristers & Solicitors
                 Box 25, Commerce Court West
              Toronto, Ontario M5L 1A9

                  S. Gordon McKee LSUC#:28557R
          Tel:  (416) 863-3884

                  Robert H. Brent LSUC#:41633S
          Tel:  (416) 863-2585
          Fax:  (416) 863-2653

                  Solicitors for the Applicant
           Glyko Biomedical Ltd.

E-3 

DEFM14A
252nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 252nd
                                                       Court File No: 02-CL-4483

IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, CHAP. C-44, 
SECTION 192, AS AMENDED AND IN THE MATTER OF AN APPLICATION BY GLYKO BIOMEDICAL 
LTD. RELATING TO A PROPOSED ARRANGEMENT INVOLVING GLYKO BIOMEDICAL LTD.,        
BIOMARIN PHARMACEUTICAL INC. and BIOMARIN ACQUISITION (NOVA SCOTIA) COMPANY     
------------------------------------------------------------------------------- 

                                             ONTARIO
                                            SUPERIOR COURT OF JUSTICE --
                                             Commercial List

                                             Proceeding Commenced at Toronto

                                             -----------------------------------

                                             NOTICE OF APPLICATION

                                             -----------------------------------

                                                    BLAKE, CASSELS & GRAYDON LLP
                                                 Barristers and Solicitors
                                                   Box 25, Commerce Court West
                                        Toronto, Ontario
                               M5L 1A9

..                                                  S. Gordon McKee LSUC#:28557R
                                            Tel:  (416) 863-3859

                                                    Robert H. Brent LSUC#:41633S
                                            Tel:  (416) 863-2585
                                            Fax:  (416) 863-2653

                                                    Solicitors for the Applicant
                                             Glyko Biomedical Ltd.

E-4 

DEFM14A
253rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 253rd
                                                     Court File No: 02-CL-4483

ONTARIO 

SUPERIOR COURT OF JUSTICE --  

COMMERCIAL LIST 

                                                                [Download Table]
                                             
                     )                       
THE HONOURABLE MADAM )   TUESDAY, THE 2ND DAY
JUSTICE EPSTEIN      )           OF JULY 2002

IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, CHAP. 
C-44, SECTION 192, AS AMENDED                                             

AND IN THE MATTER OF AN APPLICATION BY GLYKO BIOMEDICAL LTD. RELATING TO A
PROPOSED ARRANGEMENT INVOLVING GLYKO BIOMEDICAL LTD., BIOMARIN            
PHARMACEUTICAL INC. and BIOMARIN ACQUISITION (NOVA SCOTIA) COMPANY        

INTERIM ORDER 

THIS MOTION, made by the Applicant Glyko Biomedical Ltd. ("Glyko") for an 
interim order for advice and directions of the Court in connection with an      
application (the "Application") to approve an arrangement under section 192 of  
the Canada Business Corporations Act, R.S.C. 1985, Chap. C-44, as amended (the  
"CBCA"), was heard this day at 393 University Avenue, Toronto, Ontario.         

ON READING the Notice of Application issued April 11, 2002; the Notice of 
Motion and the attached draft Amended Notice of Application; the affidavit of   
John A. Kolada, sworn June 25, 2002 (the "Affidavit"), and the exhibits         
thereto; on hearing the submissions of counsel for Glyko, no one appearing for  
the Director appointed pursuant to section 260 of the CBCA although served with 
notice of this motion; and, on being advised of the consent to this Interim     
Order of BioMarin Pharmaceutical Inc. ("BioMarin") and BioMarin Acquisition     
(Nova Scotia) Company ("BioMarin Nova Scotia"),                                 

1.  THIS COURT ORDERS that for the purposes of this Order, the following        
defined terms shall have the following meanings, which meanings are set out     
with greater specificity in the draft Joint Proxy Circular (the "Joint          
Circular") of Glyko and BioMarin attached as Exhibit "A" to the Affidavit:      

(a) "Acquisition Agreement" means the acquisition agreement made as of    
   February 6, 2002, and amended May 16, 2002, among Glyko, BioMarin and
BioMarin Nova Scotia, attached as Annexes A and A-1 to the Joint  
Circular, as it may be amended, supplemented or restated;         

(b) "Glyko Shares" means the outstanding common shares in the capital of  
Glyko;                                                            

(c) "Glyko Shareholders" means the holders of Glyko Shares; and           

(d) "Glyko Options" means options granted to purchase Glyko Shares.       

2.  THIS COURT ORDERS that Glyko is authorized and directed to call, hold and   
conduct a special meeting (the "Glyko Meeting") of the Glyko Shareholders to,   
among other things, consider and, if deemed advisable, pass, with or without    
variation, a special resolution (the "Arrangement Resolution") to approve an    
arrangement (the "Arrangement") substantially in the same form set forth in the 
Plan of Arrangement as found at Annex "B" to the Joint Circular, which is       
attached as Exhibit "A" to the Affidavit.                                       

E-5 

DEFM14A
254th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 254th
3.  THIS COURT ORDERS that the Glyko Meeting shall be called, held and          
conducted in accordance with the Glyko Notice of Special Meeting of             
Shareholders that is part of the Joint Circular (the "Notice"), the CBCA and    
the articles and by-laws of Glyko, including quorum requirements, subject to    
the terms of this Order or any further Order of this Court.                     

4.  THIS COURT ORDERS that Glyko is authorized to make such amendments,         
revisions or supplements to the Plan of Arrangement as it may determine are     
appropriate, subject to the terms of the Acquisition Agreement and this Interim 
Order and without any additional notice to the Glyko Shareholders, and that the 
Plan of Arrangement as so amended, revised or supplemented shall be the Plan of 
Arrangement submitted to the Glyko Meeting and the subject of the Arrangement   
Resolution.                                                                     

5.  THIS COURT ORDERS that Glyko, if it deems it advisable, is specifically     
authorized to adjourn or postpone the Glyko Meeting on one or more occasions,   
without the necessity of first convening the Glyko Meeting or first obtaining   
any vote of Glyko Shareholders respecting the adjournment or postponement,      
subject to the terms of the Acquisition Agreement.                              

6.  THIS COURT ORDERS that the Applicant is hereby granted leave to amend the   
Notice of Application in the form attached as Schedule "B" to the Notice of     
Motion.                                                                         

7.  THIS COURT ORDERS that the Amended Notice of Application, the Notice, the   
Joint Circular, the form of letter of transmittal and the form of proxy         
(collectively referred to as the "Meeting Materials") in substantially the same 
form as contained in Exhibits "A", "B" and "C" to the Affidavit (with such      
amendments, additional communications or documents thereto as counsel for Glyko 
or BioMarin may consider are necessary or desirable, provided that such         
amendments, communications or documents are not inconsistent with the terms of  
this Order) and this Interim Order shall be disseminated, distributed, sent and 
given to the Glyko Shareholders as at the Record Date (as established in        
paragraph 9 below), the holders of Glyko Options, the directors of Glyko, the   
auditors of Glyko and BioMarin by one or more of the following methods not less 
than twenty-one (21) days before the date of the Glyko Meeting, excluding the   
date of delivery and the date of the Glyko Meeting:                             

(a) in the case of the registered holders of Glyko Shares, by prepaid     
    ordinary mail, by courier, or by delivery in person, addressed to each
      such holder at his, her or its last known address, as shown on the books
or records of Glyko;                                              

(b) in the case of non-registered holders of Glyko Shares, by providing   
   sufficient multiple copies of the Meeting Materials to intermediaries
 and registered nominees to facilitate the broad distribution of the
Meeting Materials to non-registered holders of Glyko Shares;      

(c) in the case of holders of Glyko Options, by prepaid ordinary mail, by 
      courier, or by delivery in person, addressed to each such holder at his,
       her or its last known address, as shown on the books or records of Glyko;

(d) in the case of the directors of Glyko, by courier or by delivery in   
person, addressed to the individual directors;                    

(e) in the case of the auditors of Glyko, by courier or by delivery in    
person, addressed to the firm of auditors; and                    

(f) in the case of BioMarin, by courier or by delivery in person, to the  
solicitors for BioMarin;                                          

and that such mailing, transmission, delivery and distribution shall      
 constitute good and sufficient notice of the Application, the Glyko Meeting
and the hearing in respect of the Application upon such persons.          

8.  THIS COURT ORDERS that the Meeting Materials shall be deemed, for the       
purposes of this Interim Order and the Application, to have been received:      

  (a) in the case of distribution by ordinary prepaid mail, three (3) business
days after delivery thereof to the post office;                   

(b) in the case of distribution by courier, one (1) business day after    
receipt by the courier;                                           

E-6 

DEFM14A
255th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 255th
  (c) in the case of distribution by delivery in person, on receipt thereof by
the intended addressee; and                                       

(d) in the case of distribution by facsimile transmission, upon the       
transmission thereof.                                             

9.  THIS COURT ORDERS that the record date for determining the holders of Glyko 
Shares entitled to receive the Meeting Materials and to vote at the Glyko       
Meeting, shall be the close of business on July 4, 2002, as previously approved 
by the board of directors of Glyko and published by Glyko (the "Record Date").  

10.  THIS COURT ORDERS that the accidental failure or omission to give notice   
of the Glyko Meeting, or the non-receipt of such notice, shall not invalidate   
any resolution passed or proceedings taken at the Glyko Meeting and shall not   
constitute a breach of this Interim Order.                                      

11.  THIS COURT ORDERS that Glyko is authorized to use the form of proxy (the   
"Form of Proxy"), in substantially the same form attached as Exhibit "B" to the 
Affidavit, subject to Glyko's ability to insert dates and other relevant        
information in the final Form of Proxy. Glyko is authorized, at its expense, to 
solicit proxies, directly and through its officers, directors and employees,    
and through such agents or representatives as it may retain for the purpose,    
and by mail or such other forms of personal or electronic communication as it   
may determine, subject to the terms of the Arrangement Agreement and this       
Interim Order.                                                                  

12.  THIS COURT ORDERS that Glyko may, in its discretion, waive generally the   
time limits for the deposit of proxies by the Glyko Shareholders, if Glyko      
deems it advisable to do so.                                                    

13.  THIS COURT ORDERS that the votes shall be taken at the Glyko Meeting on    
the basis that each holder of Glyko Shares is entitled to one vote for each     
Glyko Share held and that, subject to further Order of this Court, the vote     
required to pass and approve the Arrangement Resolution shall be the            
affirmative vote of not less than 66 2/3% of the votes cast on the Arrangement  
Resolution (for this purpose any spoiled votes, illegible votes, defective      
votes and abstentions shall be deemed not to be votes cast) by the holders of   
Glyko Shares, present in person or represented by proxy at the Glyko Meeting.   

14.  THIS COURT ORDERS that the only persons entitled to attend the Glyko       
Meeting shall be: (a) the holders of Glyko Shares, or their respective proxies; 
(b) the officers, directors, auditors and advisors of Glyko;                    
(c) representatives of BioMarin; and (d) other persons with the permission of   
the Chairman of the Meeting.                                                    

15.  THIS COURT ORDERS that the registered holders of Glyko Shares shall be     
entitled to exercise rights of dissent and appraisal, in accordance with and in 
compliance with section 190 of the CBCA and the Plan of Arrangement, and to     
seek fair value for their Glyko Shares, provided that any holders of Glyko      
Shares who wish to dissent (a) must have as a condition precedent thereto       
provided a written dissent notice objecting to the Arrangement Resolution to    
Glyko Biomedical Ltd., 199 Bay Street, Toronto, Ontario M5L 1A9, attn. John A.  
Kolada, facsimile: (416) 863-2653, telephone: (416) 863-2400, at or prior to    
the Glyko Meeting, and (b) must otherwise strictly comply with section 190 of   
the CBCA.                                                                       

16.  THIS COURT ORDERS that upon approval by the Glyko Shareholders of the      
Arrangement in the manner set forth in this Order, Glyko may apply to this      
Court on August 16, 2002, or such later date as the Application may be          
adjourned to, for approval of the Arrangement and that the distribution and     
delivery of the Amended Notice of Application herein, in accordance with        
paragraphs 7 and 8 of this Order, shall constitute good and sufficient service  
of such Amended Notice of Application pursuant to this Order and no other form  
of service need be made and no other material need be served on such persons in 
respect of these proceedings, unless a Notice of Appearance is served on        
Glyko's solicitors as set out below, not later than two days before the hearing 
of the Application.                                                             

17.  THIS COURT ORDERS that the only persons entitled to notice of any further  
proceedings herein, including the hearing to approve the Arrangement, and       
entitled to appear and to be heard thereon, shall be (a) solicitors for Glyko,  
(b) solicitors for BioMarin, and (c) persons who have delivered a Notice of     
Appearance                                                                      

E-7 

DEFM14A
256th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 256th
herein in accordance with the Rules of Civil Procedure and this Interim Order,  
including service of said notice on Glyko's solicitors, Blake, Cassels &        
Graydon LLP, P.O. Box 25, 199 Bay Street, Commerce Court West, Toronto, Ontario 
M5L 1A9, Attention: Robert H. Brent.                                            

18.  THIS COURT ORDERS and declares that the time for service of the Notice of  
Motion and Motion Record, including the Affidavit and the exhibits thereto, on  
the Director is abridged and that the service of the foregoing documents on the 
Director has constituted good and sufficient service.                           

19.  THIS COURT ORDERS that Glyko shall be entitled, at any time, to seek leave 
to vary this Order.                                                             

20.  THIS COURT ORDERS that, to the extent of any inconsistency or discrepancy  
with respect to the matters provided for in this Interim Order that, as between 
this Interim Order and terms of any instrument creating, governing or           
collateral to the Glyko Shares or the articles or by-laws of Glyko, this        
Interim Order shall govern.                                                     

                        (signed)  Epstein J.
                                         _____________________________________

E-8 

DEFM14A
257th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 257th
                                                       Court File No: 02-CL-4483

IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, CHAP. C-44, 
SECTION 192, AS AMENDED AND IN THE MATTER OF AN APPLICATION BY GLYKO BIOMEDICAL 
LTD. RELATING TO A PROPOSED ARRANGEMENT INVOLVING GLYKO BIOMEDICAL LTD.,        
BIOMARIN PHARMACEUTICAL INC. and BIOMARIN ACQUISTION (NOVA SCOTIA) COMPANY      
--------------------------------------------------------------------------------

                                       ONTARIO
                                      SUPERIOR COURT OF JUSTICE --
                                       Commercial List

                                       Proceeding Commenced at Toronto

                                       -----------------------------------

                                       INTERIM ORDER
                                      (Motion for Advice and Directions)

                                       -----------------------------------

                                              BLAKE, CASSELS & GRAYDON LLP
                             P.O. Box 25
                                199 Bay Street
                                     Commerce Court West
                                          Toronto, Ontario M5L 1A9

..                                                S. Gordon McKee LSUC#:28557R  
                                      Tel:  (416) 863-3884

                                              Robert H. Brent LSUC#:41633S
                                      Tel:  (416) 863-2585
                                      Fax:  (416) 862-2653

                                              Solicitors for the Applicant
                                       Glyko Biomedical Ltd.

E-9 

DEFM14A
258th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 258th
ANNEX F 

[LETTERHEAD OF UBS WARBURG LLC] 

February 6, 2002  

The Board of Directors                                                          
BioMarin Pharmaceutical Inc.                                                    
371 Bel Marin Keys Boulevard, Suite 210                                         
Novato, California 94949                                                        

Dear Members of the Board:                                                      

We understand that BioMarin Pharmaceutical Inc. ("BioMarin") proposes to  
enter into an Acquisition Agreement for a Plan of Arrangement, dated as of      
February 6, 2002 (the "Agreement"), among BioMarin, BioMarin Acquisition (Nova  
Scotia) Company, a wholly owned subsidiary of BioMarin ("BioMarin Nova          
Scotia"), and Glyko Biomedical Ltd. ("Glyko") pursuant to which (i) BioMarin,   
BioMarin Nova Scotia and Glyko will enter into a business combination by way of 
an arrangement as a result of which Glyko will become a wholly owned subsidiary 
of BioMarin Nova Scotia (the "Arrangement") and (ii) each outstanding common    
share in the capital of Glyko ("Glyko Common Shares") will be transferred to    
BioMarin Nova Scotia in exchange for the delivery by BioMarin Nova Scotia of    
0.3309 (the "Exchange Ratio") of a share of the common stock, par value $0.001  
per share, of BioMarin ("BioMarin Common Stock"). The Agreement provides that   
BioMarin Nova Scotia will not be required to transfer more than 11,367,617      
shares of BioMarin Common Stock in respect of outstanding Glyko Common Shares   
in connection with the Arrangement. The terms and conditions of the Arrangement 
are more fully set forth in the Agreement and related documents.                

  You have requested our opinion as to the fairness, from a financial point of
view, to BioMarin of the Exchange Ratio.                                        

UBS Warburg LLC ("UBS Warburg") has acted as financial advisor to BioMarin
in connection with the Arrangement and will receive a fee for its services, a   
significant portion of which is contingent upon consummation of the             
Arrangement. UBS Warburg also will receive a fee in connection with this        
opinion. UBS Warburg and its affiliates in the past have provided, and          
currently are providing, services to BioMarin unrelated to the proposed         
Arrangement, for which services UBS Warburg and its affiliates have received    
and will receive customary compensation. In the ordinary course of business,    
UBS Warburg, its successors and affiliates may trade securities of BioMarin or  
Glyko for their own accounts and accounts of customers and, accordingly, may at 
any time hold a long or short position in such securities.                      

Our opinion does not address the relative merits of the Arrangement as    
compared to other business strategies or transactions that might be available   
with respect to BioMarin or BioMarin's underlying business decision to effect   
the Arrangement, nor does our opinion constitute a recommendation to any        
stockholder of BioMarin as to how such stockholder should vote with respect to  
any matter relating to the Arrangement. We have not been asked to, nor do we,   
offer any opinion as to the terms of the Agreement or related documents and the 
obligations thereunder, or the form of the Arrangement. We express no opinion   
as to what the value of BioMarin Common Stock actually will be when issued      
pursuant to the Arrangement or the price at which BioMarin Common Stock will    
trade at any time. In rendering this opinion, we have assumed, with your        
consent, that the Arrangement will constitute a tax-free reorganization for     
BioMarin and BioMarin Nova Scotia for U.S. federal income tax purposes and that 
no Canadian income tax will be payable by BioMarin or BioMarin Nova Scotia in   
connection with the Arrangement. We also have assumed, with your consent, that  
each of BioMarin, BioMarin Nova Scotia and Glyko will comply with all material  
covenants and agreements set forth in, and other material terms of, the         
Agreement and related documents and that the Arrangement will be consummated in 
accordance with its terms without waiver, modification or amendment of any      
material term, condition or agreement.                                          

F-1 

DEFM14A
259th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 259th
The Board of Directors                                                          
BioMarin Pharmaceutical Inc.                                                    
February 6, 2002                                                                
Page 2                                                                          

In arriving at our opinion, we have, among other things: (i) reviewed     
current and historical market prices and trading volumes of BioMarin Common     
Stock and Glyko Common Shares; (ii) reviewed certain publicly available         
business and historical financial information relating to BioMarin and Glyko;   
(iii) reviewed certain internal financial information and data relating to      
BioMarin and its business and financial prospects, including estimates and      
financial forecasts prepared by the management of BioMarin, that were provided  
to or discussed with us by BioMarin and not publicly available; (iv) conducted  
discussions with members of the senior managements of BioMarin and Glyko; (v)   
considered the pro forma capitalization of BioMarin and certain pro forma       
effects of the Arrangement on the financial statements of BioMarin; (vi)        
reviewed the Agreement and certain related documents; and (vii) conducted such  
other financial studies, analyses and investigations, and considered such other 
information, as we deemed necessary or appropriate.                             

In connection with our review, with your consent, we have not assumed any 
responsibility for independent verification of any of the information provided  
to or reviewed by us for the purpose of this opinion and have, with your        
consent, relied on such information being complete and accurate in all material 
respects. In addition, at your direction, we have not made any independent      
evaluation or appraisal of any of the assets or liabilities (contingent or      
otherwise) of BioMarin or Glyko, nor have we been furnished with any such       
evaluation or appraisal. With respect to the financial forecasts and estimates  
referred to above relating to BioMarin, we have assumed, at your direction,     
that they have been reasonably prepared on a basis reflecting the best          
currently available estimates and judgments of the management of BioMarin as to 
the future financial performance of BioMarin. Our opinion is necessarily based  
on economic, monetary, market and other conditions as in effect on, and the     
information available to us as of, the date of this opinion.                    

Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio is fair, from a financial point of view, to     
BioMarin.                                                                       

                             Very truly yours,

                                /s/  UBS Warburg LLC

                           UBS WARBURG LLC

F-2 

DEFM14A
260th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 260th
ANNEX G 

                                      [LOGO] TD SECURITIES
                                            TD Securities Inc.
                                  TD Tower
                                                    66 Wellington Street West,
                                       8/th/ Floor
                                                  Toronto, Ontario M5K 1A2
February 6, 2002                                                                

The Board of Directors                                                          
Glyko Biomedical Ltd.                                                           
199 Bay Street                                                                  
Box 25, Commerce Court West                                                     
Toronto, Ontario                                                                
M5L 1A9                                                                         

To the Board of Directors:                                                      

 TD Securities Inc. ("TD Securities") understands that Glyko Biomedical Ltd.
("Glyko") and BioMarin Pharmaceutical Inc. ("BioMarin") have entered into an    
agreement dated February 6, 2002, for a plan of arrangement (the "Acquisition   
Agreement") pursuant to which BioMarin, through an indirect wholly-owned        
subsidiary, will acquire all of the issued and outstanding common shares of     
Glyko (the "Common Shares") on and subject to certain terms and conditions (the 
"Arrangement").                                                                 

Under the terms of the Arrangement, holders of Common Shares will receive 
consideration consisting of 0.3309 common shares of BioMarin for each Common    
Share owned (the "BioMarin Share Consideration"). The Arrangement is            
conditional upon, among other things, the affirmative vote of at least 66 2/3%  
of votes cast by holders of Common Shares at a meeting of Glyko shareholders    
called for the purposes of considering the Arrangement ("Special Meeting"). We  
understand that the Special Meeting will be held no later than May 31, 2002.    

TD Securities also understands that holders of Common Shares representing 
approximately 27.3% of the issued and outstanding Common Shares (calculated on  
a fully diluted basis) have entered agreements with BioMarin ("Shareholder      
Support Agreements") pursuant to which the shareholders have agreed, subject to 
certain conditions, to vote their Common Shares in favour of the Arrangement.   

The terms and conditions of and other matters relating to the Arrangement 
are more fully described in the joint management circular (the "Circular") to   
be mailed to Glyko shareholders in connection with the Arrangement.             

Engagement                                                                      

The Board of Directors of Glyko (the "Board") retained TD Securities      
pursuant to an engagement agreement dated August 30, 2001 and effective as of   
July 13, 2001 (the "Engagement Agreement"). TD Securities provided financial    
advice to the Board in connection with the Arrangement, including the           
preparation and delivery of an opinion (the "Fairness Opinion") as to the       
fairness of the BioMarin Share Consideration, from a financial point of view,   
to the holders of Common Shares.                                                

  The Fairness Opinion is being provided to the Company under the terms of the
Engagement Agreement. TD Securities was not engaged to provide (and has not     
provided) a formal valuation or appraisal of Glyko or BioMarin or any of their  
respective assets or liabilities and the Fairness Opinion should not be         
construed as such.                                                              

G-1 

DEFM14A
261st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 261st
TD Securities was similarly not engaged to review any legal, accounting or tax  
aspects of the Arrangement. In preparing the Fairness Opinion, TD Securities    
considered the fairness of the BioMarin Share Consideration from the            
perspective of holders of Common Shares generally and did not consider the      
specific circumstances, particularly with respect to the income tax             
consequences of the Arrangement, of any particular holder.                      

The Engagement Agreement provides for TD Securities to receive a financial
advisory fee upon completion of the Arrangement, as well as reimbursement for   
all reasonable out-of-pocket expenses. Glyko has agreed to indemnify TD         
Securities from and against certain costs and liabilities arising directly or   
indirectly out of the performance of professional services rendered to Glyko by 
TD Securities and its personnel under the Engagement Agreement or otherwise.    

Credentials of TD Securities                                                    

TD Securities is a Canadian investment banking firm with operations in a  
broad range of activities, including corporate and government finance, mergers  
and acquisitions, equity and fixed income sales and trading, investment         
management and investment research. TD Securities has participated in a         
significant number of transactions involving public and private companies and   
has extensive experience in preparing fairness opinions.                        

The Fairness Opinion is the opinion of TD Securities and its form and     
content have been approved by a committee of senior investment banking          
professionals of TD Securities, each of whom is experienced in merger,          
acquisition, divestiture, valuation and fairness opinion matters.               

Relationship with Interested Parties                                            

  Neither TD Securities, nor any of its affiliates is an insider, associate or
affiliate (as those terms are defined in the Securities Act (Ontario) (the      
"Act")) of Glyko, BioMarin or any of their respective associates or affiliates  
(collectively, the "Interested Parties"). Except as financial advisor to Glyko  
pursuant to the Engagement Agreement, neither TD Securities nor any of its      
affiliates has been engaged to provide financial advisory services to any of    
the Interested Parties with respect to the Arrangement.                         

  TD Securities has not, in the 24 month period preceding the date on which TD
Securities was first contacted in respect of the Arrangement, been engaged to   
provide financial advisory services or to act as lead or co-lead underwriter of 
securities of Glyko, BioMarin, or any other Interested Party.                   

  Other than the Engagement Agreement, there are no understandings, agreements
or commitments between TD Securities and Glyko, BioMarin or any other           
Interested Party with respect to any future business dealings. TD Securities    
may, in the future, in the ordinary course of its business, perform financial   
advisory or investment banking services for, and TD Bank may provide banking    
services to, Glyko, BioMarin or any other Interested Party.                     

TD Securities acts as a trader and dealer, both as principal and agent, in
major financial markets and, as such, may have and may in the future have       
positions in the securities of Glyko, BioMarin or any other Interested Party    
and, from time to time, may have executed or may execute transactions on behalf 
of such companies or other clients for which it may have received or may        
receive compensation. As an investment dealer, TD Securities conducts research  
on securities and may, in the ordinary course of its business, provide research 
reports and investment advice to its clients on investment matters, including   
matters with respect to the Arrangement, Glyko, BioMarin or any other           
Interested Party.                                                               

Scope of Review                                                                 

In connection with this Fairness Opinion, TD Securities has reviewed and  
relied upon (without attempting to verify independently the completeness or     
accuracy of) or carried out, among other things, the following:                 

1. the Acquisition Agreement;                                           

2. the Shareholder Support Agreement;                                   

G-2 

DEFM14A
262nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 262nd
   3. audited financial statements of Glyko and BioMarin for each of the years
ended December 31, 1999 and 2000;                                 

4. unaudited interim financial statements of Glyko and BioMarin for the 
   three-month periods ended September 30, 2001, June 30, 2001 and March
31, 2001;                                                         

5. annual reports and Forms 10-K of Glyko for each of the years ended   
December 31, 1999 and 2000;                                       

6. annual reports and Forms 10-K of BioMarin for each of the years ended
December 31, 1999 and 2000;                                       

7. notices of annual meetings of shareholders and management proxy      
  circulars of Glyko for each of the years ended December 31, 1999 and
2000;                                                             

   8. press releases and other regulatory filings of Glyko and BioMarin during
the two year period ending February 5, 2002;                      

   9. corporate documents of Glyko, including material contracts and licenses,
minutes of the Board and other corporate documents;               

10. discussions with senior management of Glyko with respect to the       
information referred to herein and other issues deemed relevant;  

11. discussions with Blake, Cassels & Graydon LLP, Canadian legal and tax 
advisors to Glyko;                                                

12. discussions with Arthur Anderson LLP, auditors of Glyko;              

 13. a due diligence session and other discussions with senior management of
BioMarin;                                                         

14. relevant public information, relating to the business, operations,    
    financial performance and share trading history of Glyko, BioMarin and
other selected public companies considered to be relevant;        

15. various research publications prepared by equity research analysts    
regarding BioMarin;                                               

16. representations contained in a certificate dated as of the date hereof
from senior officers of Glyko; and                                

17. such other corporate, industry, and financial market information,     
  investigations and analyses as TD Securities considered necessary or
appropriate in the circumstances.                                 

TD Securities has not, to the best of its knowledge, been denied access by
Glyko to any information requested by TD Securities.                            

General Assumptions and Limitations                                             

 With Glyko's acknowledgment and agreement as provided for in the Engagement
Agreement, TD Securities has relied upon the accuracy, completeness and fair    
representation of all data and other information obtained by us from public     
sources and that was provided to TD Securities by Glyko and BioMarin and their  
respective personnel, advisors, or otherwise, including the certificate         
identified below (collectively, the "Information"). The Fairness Opinion is     
conditional upon such accuracy, completeness and fair representation. Subject   
to the exercise of professional judgment and except as expressly described      
herein, TD Securities has not attempted to verify independently the             
completeness, accuracy or fair representation of any of the Information.        

 Senior officers of Glyko have represented to TD Securities in a certificate
delivered as of February 6, 2002, among other things, that (i) Glyko has no     
information or knowledge of any facts public or otherwise not specifically      
provided to TD Securities relating to Glyko or BioMarin and its subsidiaries,   
which would reasonably be expected to affect materially the Fairness Opinion or 
the decision of Glyko to proceed with the Arrangement; (ii) the information and 
data provided to TD Securities by or on behalf of Glyko in respect of Glyko in  
connection with the Fairness Opinion is or, in the case of historical           
information and data, was, at the date of preparation, true and complete in all 
material respects and no additional material, data or information would be      
required to make the information and data provided to TD Securities not         
misleading in the light of circumstances in which it was provided; (iii) to the 
extent that any of the information and data identified in subparagraph (ii)     
above is historical and Glyko has been requested by TD Securities to update     
such information,                                                               

G-3 

DEFM14A
263rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 263rd
there have been no changes in any material facts or new material facts since    
the respective dates thereof which have not been disclosed to TD Securities or  
updated by more current information and data not provided to TD Securities by   
Glyko; (iv) there have been no valuations or appraisals of Glyko or any         
material property of Glyko made in the preceding 12 months and in the           
possession or control of Glyko other than those which have been provided to TD  
Securities or, in the case of valuations known to Glyko which it does not have  
within its possession or control, notice of which has not been given to TD      
Securities; (v) there have been no offers for or transactions involving any     
material property of Glyko during the preceding 12 months which have not been   
disclosed to TD Securities; and (vi) other than in connection with the          
Arrangement, Glyko has no information or knowledge of any material non-public   
information concerning the securities, assets, liabilities, operations,         
affairs, prospects or condition (financial or otherwise) of Glyko or BioMarin   
and its subsidiaries that has not been generally disclosed.                     

In preparing the Fairness Opinion, TD Securities has made several         
assumptions, including that all conditions precedent to the completion of the   
Arrangement can be satisfied in due course, that all consents, permissions,     
exemptions or orders of relevant regulatory authorities will be obtained,       
without adverse condition or qualification, the procedures being followed to    
implement the Arrangement are valid and effective, the Circular will be         
distributed to the shareholders of Glyko in accordance with the applicable      
laws, and the disclosure in the Circular will be accurate in all material       
respects and will comply, in all material respects, with the requirements of    
all applicable laws. In its analysis in connection with the preparation of the  
Fairness Opinion, TD Securities made several assumptions with respect to        
general business and economic conditions and other matters, many of which are   
beyond the control of TD Securities, Glyko or BioMarin.                         

This Fairness Opinion is addressed to the Board and is not intended to be,
and does not constitute, a recommendation as to how any holder of Common Shares 
should vote with respect to the Arrangement. The Fairness Opinion may not be    
published, reproduced, disseminated, quoted from or referred to without the     
express written consent of TD Securities, save as hereinafter provided. Subject 
to the terms of the Engagement Agreement, TD Securities consents to the         
inclusion of the Fairness Opinion in the Circular to be sent to holders of      
Common Shares in connection with the Arrangement, with a summary thereof, in a  
form acceptable to TD Securities, and to the filing thereof with the applicable 
Canadian securities regulatory authorities.                                     

The Fairness Opinion is given as of February 6, 2002 on the basis of      
securities markets, economic and general business and financial conditions      
prevailing on that date and the condition and prospects, financial and          
otherwise, of Glyko and BioMarin as they were reflected in the Information      
provided to TD Securities. Any changes therein may affect the Fairness Opinion  
and, although TD Securities reserves the right to change or withdraw the        
Fairness Opinion in such event, it disclaims any undertaking or obligation to   
advise any person of any such change that may come to our attention, or update  
the Fairness Opinion after such date.                                           

The preparation of a fairness opinion is a complex process and is not     
necessarily susceptible to partial analysis or summary description. TD          
Securities believes that its analyses must be considered as a whole and that    
selecting portions of the analyses or the factors considered by it, without     
considering all factors and analyses together, could create an incomplete view  
of the process underlying the Fairness Opinion. TD Securities is not opining as 
to the market value or the prices at which any of the securities of Glyko or    
BioMarin may trade at any time.                                                 

G-4 

DEFM14A
264th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 264th
Conclusion                                                                      

Based upon and subject to the foregoing, TD Securities is of the opinion  
that, as of February 6, 2002, the BioMarin Share Consideration is fair, from a  
financial point of view, to the holders of Common Shares.                       

                     Yours very truly,

                          /s/ TD SECURITIES INC.

G-5 

DEFM14A
265th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 265th
ANNEX H 

SECTION 190 OF THE CANADA BUSINESS CORPORATIONS ACT 

Part XV--Fundamental Changes                                                    

190.  (1) Right to dissent--Subject to sections 191 and 241, a holder of shares 
of any class of a corporation may dissent if the corporation is subject to an   
order under paragraph 192(4)(d) that affects the holder or if the corporation   
resolves to                                                                     

(a) amend its articles under section 173 or 174 to add, change or remove
 any provisions restricting or constraining the issue, transfer or
ownership of shares of that class;                              

(b) amend its articles under section 173 to add, change or remove any   
  restriction on the business or businesses that the corporation may
carry on;                                                       

(c) amalgamate otherwise than under section 184;                        

(d) be continued under section 188;                                     

(e) sell, lease or exchange all or substantially all its property under 
subsection 189(3); or                                           

(f) carry out a going-private transaction or a squeeze-out transaction. 

(2)  Further right--A holder of shares of any class or series of shares         
    entitled to vote under section 176 may dissent if the corporation resolves
to amend its articles in a manner described in that section.          

(2.1)  If one class of shares--The right to dissent described in subsection (2) 
applies even if there is only one class of shares.                

(3)  Payment for shares--In addition to any other right the shareholder may     
    have, but subject to subsection (26), a shareholder who complies with this
    section is entitled, when the action approved by the resolution from which
   the shareholder dissents or an order made under subsection 192(4) becomes
  effective, to be paid by the corporation the fair value of the shares in
  respect of which the shareholder dissents, determined as of the close of
business on the day before the resolution was adopted or the order was
made.                                                                 

(4)  No partial dissent--A dissenting shareholder may only claim under this     
 section with respect to all the shares of a class held on behalf of any
one beneficial owner and registered in the name of the dissenting     
shareholder.                                                          

(5)  Objection--A dissenting shareholder shall send to the corporation, at or   
 before any meeting of shareholders at which a resolution referred to in
subsection (1) or (2) is to be voted on, a written objection to the   
   resolution, unless the corporation did not give notice to the shareholder
of the purpose of the meeting and of their right to dissent.          

(6)  Notice of resolution--The corporation shall, within ten days after the     
   shareholders adopt the resolution, send to each shareholder who has filed
    the objection referred to in subsection (5) notice that the resolution has
been adopted, but such notice is not required to be sent to any       
shareholder who voted for the resolution or who has withdrawn their   
objection.                                                            

(7)  Demand for payment--A dissenting shareholder shall, within twenty days     
   after receiving a notice under subsection (6) or, if the shareholder does
not receive such notice, within twenty days after learning that the   
resolution has been adopted, send to the corporation a written notice 
containing:                                                           

(a) the shareholder's name and address;                                 

(b) the number and class of shares in respect of which the shareholder  
dissents; and                                                   

(c) a demand for payment of the fair value of such shares.              

H-1 

DEFM14A
266th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 266th
(8)  Share certificate--A dissenting shareholder shall, within thirty days      
after sending a notice under subsection (7), send the certificates    
 representing the shares in respect of which the shareholder dissents to
the corporation or its transfer agent.                                

(9)  Forfeiture--A dissenting shareholder who fails to comply with subsection   
(8) has no right to make a claim under this section.                  

(10) Endorsing certificate--A corporation or its transfer agent shall endorse   
  on any share certificate received under subsection (8) a notice that the
   holder is a dissenting shareholder under this section and shall forthwith
return the share certificates to the dissenting shareholder.          

(11) Suspension of rights--On sending a notice under subsection (7), a          
 dissenting shareholder ceases to have any rights as a shareholder other
 than to be paid the fair value of their shares as determined under this
section except where:                                                 

 (a) the shareholder withdraws that notice before the corporation makes an
offer under subsection (12),                                    

(b) the corporation fails to make an offer in accordance with subsection
(12) and the shareholder withdraws the notice, or               

(c) the directors revoke a resolution to amend the articles under       
      subsection 173(2) or 174(5), terminate an amalgamation agreement under
subsection 183(6) or an application for continuance under       
subsection 188(6), or abandon a sale, lease or exchange under   
subsection 189(9),                                              

in which case the shareholder's rights are reinstated as of the date the
notice was sent.                                                        

(12) Offer to pay--A corporation shall, not later than seven days after the     
later of the day on which the action approved by the resolution is    
 effective or the day the corporation received the notice referred to in
subsection (7), send to each dissenting shareholder who has sent such 
notice:                                                               

  (a) a written offer to pay for their shares in an amount considered by the
   directors of the corporation to be the fair value, accompanied by a
statement showing how the fair value was determined; or         

 (b) if subsection (26) applies, a notification that it is unable lawfully
to pay dissenting shareholders for their shares.                

(13) Same terms--Every offer made under subsection (12) for shares of the same  
class or series shall be on the same terms.                           

(14) Payment--Subject to subsection (26), a corporation shall pay for the       
shares of a dissenting shareholder within ten days after an offer made
   under subsection (12) has been accepted, but any such offer lapses if the
corporation does not receive an acceptance thereof within thirty days 
after the offer has been made.                                        

(15) Corporation may apply to court--Where a corporation fails to make an offer 
  under subsection (12), or if a dissenting shareholder fails to accept an
    offer, the corporation may, within fifty days after the action approved by
  the resolution is effective or within such further period as a court may
allow, apply to a court to fix a fair value for the shares of any     
dissenting shareholder.                                               

(16) Shareholder application to court--If a corporation fails to apply to a     
    court under subsection (15), a dissenting shareholder may apply to a court
    for the same purpose within a further period of twenty days or within such
further period as a court may allow.                                  

(17) Venue--An application under subsection (15) or (16) shall be made to a     
court having jurisdiction in the place where the corporation has its  
registered office or in the province where the dissenting shareholder 
resides if the corporation carries on business in that province.      

(18) No security for costs--A dissenting shareholder is not required to give    
  security for costs in an application made under subsection (15) or (16).

H-2 

DEFM14A
267th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 267th
(19) Parties--On an application to a court under subsection (15) or (16),       

   (a) all dissenting shareholders whose shares have not been purchased by the
       corporation shall be joined as parties and are bound by the decision of
the court; and                                                  

(b) the corporation shall notify each affected dissenting shareholder of
      the date, place and consequences of the application and of their right
to appear and be heard in person or by counsel.                 

(20) Powers of court--On an application to a court under subsection (15) or     
(16), the court may determine whether any other person is a dissenting
   shareholder who should be joined as a party, and the court shall then fix
a fair value for the shares of all dissenting shareholders.           

(21) Appraisers--A court may in its discretion appoint one or more appraisers   
  to assist the court to fix a fair value for the shares of the dissenting
shareholders.                                                         

(22) Final order--The final order of a court shall be rendered against the      
    corporation in favour of each dissenting shareholder and for the amount of
his shares as fixed by the court.                                     

(23) Interest--A court may in its discretion allow a reasonable rate of         
interest on the amount payable to each dissenting shareholder from the
   date the action approved by the resolution is effective until the date of
payment.                                                              

(24) Notice that subsection (26) applies--If subsection (26) applies, the       
corporation shall, within ten days after the pronouncement of an order
under subsection (22), notify each dissenting shareholder that it is  
unable lawfully to pay dissenting shareholders for their shares.      

(25) Effect where subsection (26) applies--If subsection (26) applies, a        
dissenting shareholder, by written notice delivered to the corporation
 within thirty days after receiving a notice under subsection (24), may:

(a) withdraw their notice of dissent, in which case the corporation is  
     deemed to consent to the withdrawal and the shareholder is reinstated
to their full rights as a shareholder; or                       

(b) retain a status as a claimant against the corporation, to be paid as
       soon as the corporation is lawfully able to do so or, in a liquidation,
      to be ranked subordinate to the rights of creditors of the corporation
but in priority to its shareholders.                            

(26) Limitation--A corporation shall not make a payment to a dissenting         
shareholder under this section if there are reasonable grounds for    
believing that:                                                       

(a) the corporation is or would after the payment be unable to pay its  
liabilities as they become due; or                              

  (b) the realizable value of the corporation's assets would thereby be less
than the aggregate of its liabilities.                          

H-3 

DEFM14A
268th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 268th
ANNEX I 

BIOMARIN CONSOLIDATED AUDITED FINANCIAL STATEMENTS  

Index to BioMarin Pharmaceutical Inc. Consolidated Financial Statements         

                                                                [Download Table]
                                                               
Report of Independent Public Accountants..................  I-2
Consolidated Balance Sheets...............................  I-3
Consolidated Statements of Operations.....................  I-4
Consolidated Statements of Changes in Stockholders' Equity  I-5
Consolidated Statements of Cash Flows..................... I-10
Notes to Consolidated Financial Statements................ I-11

I-1 

DEFM14A
269th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 269th
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS* 

To the Stockholders of                                                          
BioMarin Pharmaceutical Inc.:                                                   

We have audited the accompanying consolidated balance sheets of BioMarin  
Pharmaceutical Inc. (a Delaware corporation in the development stage) and       
Subsidiaries as of December 31, 2000 and 2001, and the related consolidated     
statements of operations, changes in stockholders' equity, and cash flows for   
the years ended December 31, 1999, 2000, and 2001. These financial statements   
are the responsibility of the Company's management. Our responsibility is to    
express an opinion on these financial statements based on our audits.           

We conducted our audits in accordance with auditing standards generally   
accepted in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test       
basis, evidence supporting the amounts and disclosures in the financial         
statements. An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BioMarin Pharmaceutical     
Inc. and Subsidiaries as of December 31, 2000 and 2001 and the results of their 
operations and their cash flows for the years ended December 31, 1999, 2000,    
and 2001 in conformity with accounting principles generally accepted in the     
United States.                                                                  

                            /s/  ARTHUR ANDERSEN LLP

San Francisco, California                                                       
February 21, 2002                                                               

* This report is a copy of a previously issued Arthur Andersen LLP report and   
this report has not been reissued by Arthur Andersen LLP.                   

I-2 

DEFM14A
270th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 270th
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Balance Sheets as of December 31, 2000 and 2001 and March 31, 2002 
(In thousands, except for share and per share data) 

                                                        [Enlarge/Download Table]

                                                                        December 31,                
                                                                    -------------------   March 31, 
                                                                      2000       2001       2002    
                                                                    --------  ---------  -----------
                                                                                         (unaudited)
                                                                                                    
                              ASSETS                                                                
Current assets:                                                                                     
   Cash and cash equivalents....................................... $ 16,530  $  12,528   $  18,202 
   Short-term investments..........................................   23,671    118,569      96,596 
   Due from BioMarin/Genzyme LLC...................................    1,799      3,096       5,888 
   Current assets of discontinued operations of Glyko, Inc.........      918        668         852 
   Other current assets............................................    1,623      1,922       1,888 
                                                                    --------  ---------   --------- 
       Total current assets........................................   44,541    136,783     123,426 
Property and equipment, net........................................   20,715     32,560      33,059 
Investment in BioMarin/Genzyme LLC.................................    1,482      1,145        (512)
Note receivable from officer.......................................       --        889         899 
Non-current assets of discontinued operations of Glyko, Inc........    9,862         --          -- 
Deposits...........................................................      333        434         434 
                                                                    --------  ---------   --------- 
       Total assets................................................ $ 76,933  $ 171,811   $ 157,306 
                                                                    ========  =========   ========= 
               LIABILITIES AND STOCKHOLDERS' EQUITY                                                 
Current liabilities:                                                                                
   Accounts payable................................................ $  4,647  $   4,284   $   3,188 
   Accrued liabilities.............................................    1,951      2,198       4,375 
   Current liabilities of discontinued operations of Glyko, Inc....      258        229         154 
   Current portion of capital lease obligations....................       --         66         193 
   Short term portion of notes payable.............................       27      1,525       1,525 
                                                                    --------  ---------   --------- 
       Total current liabilities...................................    6,883      8,302       9,435 
Long-term liabilities:                                                                              
   Long term portion of notes payable..............................       56      3,864       3,421 
   Long term portion capital lease obligations.....................       --         97          82 
                                                                    --------  ---------   --------- 
       Total liabilities...........................................    6,939     12,263      12,938 
                                                                    --------  ---------   --------- 
Commitments and contingencies (note 8)                                                              
Stockholders' equity:                                                                               
   Common stock, $0.001 par value: 75,000,000 shares authorized,                                    
     36,921,966, 52,402,355 and 53,357,642 shares issued and                                        
     outstanding at December 31, 2000 and 2001 and March 31, 2002,                                  
     respectively..................................................       37         52          53 
   Additional paid-in capital......................................  153,940    305,230     316,469 
   Warrants........................................................       --      5,134       5,219 
   Deferred compensation...........................................   (1,530)      (699)       (490)
   Notes receivable from stockholders..............................   (1,940)    (2,037)     (2,087)
   Foreign currency translation adjustment.........................       --        (13)        (74)
   Deficit accumulated during the development stage................  (80,513)  (148,119)   (174,722)
                                                                    --------  ---------   --------- 
       Total stockholders' equity..................................   69,994    159,548     144,368 
                                                                    --------  ---------   --------- 
       Total liabilities and stockholders' equity.................. $ 76,933  $ 171,811   $ 157,306 
                                                                    ========  =========   ========= 

The accompanying notes are an integral part of these statements.  

I-3 

DEFM14A
271st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 271st
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Operations for 
the Years Ended December 31, 1999, 2000 and 2001 and for  
the Three Month Periods Ended March 31, 2001 and 2002 and for 
the Period from March 21, 1997 (inception) to March 31, 2002  
(In thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                                                                        Period from  
                                                                                       March 21, 1997
                                              December 31,              March 31,      (inception) to
                                      ----------------------------  -----------------    March 31,   
                                        1999      2000      2001      2001     2002         2002     
                                      --------  --------  --------  -------  --------  --------------
                                                                               (unaudited)           
                                                                                                     
Revenues:                                                                                            
   BioMarin/Genzyme LLC.............. $  5,300  $  9,714  $ 11,330  $ 2,690  $  3,792    $  30,990   
   Other revenues....................       --        --       369       --        --          369   
                                      --------  --------  --------  -------  --------    ---------   
       Total revenues................    5,300     9,714    11,699    2,690     3,792       31,359   
                                      --------  --------  --------  -------  --------    ---------   
Operating costs and expenses:                                                                        
   Research and development..........   26,341    34,459    45,283    9,657    13,218      131,501   
   General and administrative........    4,757     6,507     6,718    1,474     3,926       25,970   
   In-process research and                                                                           
     development.....................       --        --    11,647       --    11,223       22,870   
   Facility closure..................       --     4,423        --       --        --        4,423   
                                      --------  --------  --------  -------  --------    ---------   
       Total operating costs and                                                                     
         expenses....................   31,098    45,389    63,648   11,131    28,367      184,764   
                                      --------  --------  --------  -------  --------    ---------   
       Loss from operations..........  (25,798)  (35,675)  (51,949)  (8,441)  (24,575)    (153,405)  
Interest income......................    1,832     2,979     1,871      468       380        7,812   
Interest expense.....................     (732)       (7)      (17)      (2)      (91)        (847)  
Equity in loss of BioMarin/Genzyme                                                                   
  LLC................................   (1,673)   (2,912)   (7,333)  (1,108)   (2,298)     (14,263)  
                                      --------  --------  --------  -------  --------    ---------   
       Net loss from continuing                                                                      
         operations..................  (26,371)  (35,615)  (57,428)  (9,083)  (26,584)    (160,703)  
Income (loss) from discontinued                                                                      
  operations.........................   (1,701)   (1,749)   (2,266)    (617)      122       (5,966)  
Loss from disposal of discontinued                                                                   
  operations.........................       --        --    (7,912)      --      (141)      (8,053)  
                                      --------  --------  --------  -------  --------    ---------   
       Net loss...................... $(28,072) $(37,364) $(67,606) $(9,700) $(26,603)   $(174,722)  
                                      ========  ========  ========  =======  ========    =========   
Net loss per share, basic and diluted                                                                
   Loss from continuing operations... $  (0.88) $  (0.99) $  (1.40) $ (0.24) $  (0.51)   $   (5.44)  
                                      ========  ========  ========  =======  ========    =========   
   Income (loss) from discontinued                                                                   
     operations...................... $  (0.06) $  (0.05) $  (0.06) $ (0.02) $     --    $   (0.20)  
                                      ========  ========  ========  =======  ========    =========   
   Loss on disposal of discontinued                                                                  
     operations...................... $     --  $     --  $  (0.19) $    --  $     --    $   (0.27)  
                                      ========  ========  ========  =======  ========    =========   
       Net loss...................... $  (0.94) $  (1.04) $  (1.65) $ (0.26) $  (0.51)   $   (5.91)  
                                      ========  ========  ========  =======  ========    =========   
Weighted average common shares                                                                       
  outstanding........................   29,944    35,859    41,083   37,052    52,535       29,539   
                                      ========  ========  ========  =======  ========    =========   

The accompanying notes are an integral part of these statements.  

I-4 

DEFM14A
272nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 272nd
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Changes in Stockholders' Equity for the  
Period from March 21, 1997 (inception) to December 31, 1998 and for 
Years ended December 31, 1999, 2000 and 2001 and  
for the Three-Month Period ended March 31, 2002 (unaudited) 
(In thousands, except per share data) 

                                                        [Enlarge/Download Table]


                                                                           Common Stock  Additional   Warrants                
                                                                           -------------  Paid-in   -------------   Deferred  
                                                                           Shares Amount  Capital   Shares Amount Compensation
                                                                           ------ ------ ---------- ------ ------ ------------
                                                                                                                              
BALANCE, MARCH 21, 1997...................................................     --  $--    $    --     --    $ --    $    --   
Issuance of common stock to Glyko Biomedical, Ltd. on March 21, 1997,                                                         
 for cash, $1.00 per share................................................  1,500    1      1,499     --      --         --   
Issuance of common stock to Glyko Biomedical Ltd. in June 1997, in                                                            
 exchange for technology, $1.00 per share.................................  7,000    7         (7)    --      --         --   
Issuance of common stock in October 1997, $1.00 per share (net of                                                             
 issuance costs of $439,720, including the issuance of 299,000 shares of                                                      
 common stock, $1.00 per share, and warrants to purchase an additional                                                        
 299,000 shares of common stock for brokerage services)...................  4,039    4      3,595    299      48         --   
Issuance of common stock to employees in exchange for notes in October                                                        
 1997, $1.00 per share....................................................  2,500    3      2,497     --      --       (200)  
Issuance of common stock and warrants on December 31, 1997, $1.00 per                                                         
 share (net of issuance costs of $592,309, including the issuance of                                                          
 502,500 shares of common stock, $1.00 per share and warrants to                                                              
 purchase an additional 502,500 shares of common stock for brokerage                                                          
 services)................................................................  5,528    6      4,930    503      80         --   
Issuance of common stock on June 30, 1998, for cash, $6.00 per share (net                                                     
 of issuance costs of $263,208, including the issuance of 31,368 shares                                                       
 of common stock, $6.00 per share, for brokerage services)................    599    1      3,328     --      --         --   
Issuance of common stock on July 14, 1998, for cash, $6.00 per share (net                                                     
 of issuance costs of $387,474, including the issuance of 64,579 shares                                                       
 of common stock, $6.00 per share, for brokerage services)................  1,385    1      7,924     --      --         --   
Issuance of common stock on August 3, 1998, for cash, $6.00 per share                                                         
 (net of issuance costs of $12,318, including the issuance of 2,053 shares                                                    
 of common stock, $6.00 per share, for brokerage services)................     31   --        176     --      --         --   
Issuance of common stock to Genzyme Corporation on September 2,                                                               
 1998, for cash, $6.00 per share..........................................  1,333    1      7,999     --      --         --   
Issuance of common stock to Glyko Biomedical, Ltd. for the purchase of                                                        
 Glyko, Inc. on October 7, 1998, for common shares, $6.00 per share                                                           
 and the assumption of options of Glyko, Inc. employees...................  2,259    2     14,859     --      --         --   
Common stock options granted in exchange for services.....................     --   --         35     --      --        (17)  
Exercise of common stock options..........................................      2   --          1     --      --         --   
Interest on notes receivable..............................................     --   --         --     --      --         --   
Deferred compensation on stock options....................................     --   --      3,222     --      --     (3,222)  
Amortization of deferred compensation.....................................     --   --         --     --      --        186   
Net loss for the period from March 31, 1997 (inception), to December 31,                                                      
 1998.....................................................................     --   --         --     --      --         --   
                                                                           ------  ---    -------    ---    ----    -------   
BALANCE, DECEMBER 31, 1998................................................ 26,176  $26    $50,058    802    $128    $(3,253)  
                                                                           ======  ===    =======    ===    ====    =======   
                                                        [Enlarge/Download Table]

                                                                              Notes       Deficit                
                                                                            Receivable  Accumulated     Total    
                                                                               from       During    Stockholders'
                                                                           Stockholders Development    Equity    
                                                                           ------------    Stage    -------------
                                                                                                                 
BALANCE, MARCH 21, 1997...................................................   $    --     $     --     $     --   
Issuance of common stock to Glyko Biomedical, Ltd. on March 21, 1997,                                            
 for cash, $1.00 per share................................................        --           --        1,500   
Issuance of common stock to Glyko Biomedical Ltd. in June 1997, in                                               
 exchange for technology, $1.00 per share.................................        --           --           --   
Issuance of common stock in October 1997, $1.00 per share (net of                                                
 issuance costs of $439,720, including the issuance of 299,000 shares of                                         
 common stock, $1.00 per share, and warrants to purchase an additional                                           
 299,000 shares of common stock for brokerage services)...................        --           --        3,647   
Issuance of common stock to employees in exchange for notes in October                                           
 1997, $1.00 per share....................................................    (2,300)          --           --   
Issuance of common stock and warrants on December 31, 1997, $1.00 per                                            
 share (net of issuance costs of $592,309, including the issuance of                                             
 502,500 shares of common stock, $1.00 per share and warrants to                                                 
 purchase an additional 502,500 shares of common stock for brokerage                                             
 services)................................................................        --           --        5,016   
Issuance of common stock on June 30, 1998, for cash, $6.00 per share (net                                        
 of issuance costs of $263,208, including the issuance of 31,368 shares                                          
 of common stock, $6.00 per share, for brokerage services)................        --           --        3,329   
Issuance of common stock on July 14, 1998, for cash, $6.00 per share (net                                        
 of issuance costs of $387,474, including the issuance of 64,579 shares                                          
 of common stock, $6.00 per share, for brokerage services)................        --           --        7,925   
Issuance of common stock on August 3, 1998, for cash, $6.00 per share                                            
 (net of issuance costs of $12,318, including the issuance of 2,053 shares                                       
 of common stock, $6.00 per share, for brokerage services)................        --           --          176   
Issuance of common stock to Genzyme Corporation on September 2,                                                  
 1998, for cash, $6.00 per share..........................................        --           --        8,000   
Issuance of common stock to Glyko Biomedical, Ltd. for the purchase of                                           
 Glyko, Inc. on October 7, 1998, for common shares, $6.00 per share                                              
 and the assumption of options of Glyko, Inc. employees...................        --           --       14,861   
Common stock options granted in exchange for services.....................        --           --           18   
Exercise of common stock options..........................................        --           --            1   
Interest on notes receivable..............................................      (188)          --         (188)  
Deferred compensation on stock options....................................        --           --           --   
Amortization of deferred compensation.....................................        --           --          186   
Net loss for the period from March 31, 1997 (inception), to December 31,                                         
 1998.....................................................................        --      (15,077)     (15,077)  
                                                                             -------     --------     --------   
BALANCE, DECEMBER 31, 1998................................................   $(2,488)    $(15,077)    $(29,394)  
                                                                             =======     ========     ========   

The accompanying notes are an integral part of these statements.  

I-5 

DEFM14A
273rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 273rd
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Changes in Stockholders' Equity for the  
Period from March 21, 1997 (inception) to December 31, 1998 and for 
Years ended December 31, 1999, 2000 and 2001 and  
for the Three-Month Period ended March 31, 2002 (unaudited) 
(In thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                                                                                   Deficit            
                                                                                       Notes     Accumulated          
                                    Common Stock  Additional   Warrants              Receivable    During     Total   
                                    -------------  Paid-in   ------------- Deferred     from     Development   SH's   
                                    Shares Amount  Capital   Shares Amount  Comp.   Stockholders    Stage     Equity  
                                    ------ ------ ---------- ------ ------ -------- ------------ ----------- -------- 
                                                                                                                      
Balance at January 1, 1999......... 26,176  $26    $ 50,058   802    $128  $(3,253)   $(2,488)    $(15,077)  $ 29,394 
Issuance of common stock on July                                                                                      
 23, 1999, in an initial public                                                                                       
 offering (IPO) for cash at                                                                                           
 $13.00 per share (net of issuance                                                                                    
 costs of $7)......................  4,500    4      51,805    --      --       --         --           --     51,809 
Issuance of common stock on July                                                                                      
 23, 1999 to Genzyme Corporation                                                                                      
 in a private placement concurrent                                                                                    
 with the IPO for cash at                                                                                             
 $13.00 per share..................    769    1       9,999    --      --       --         --           --     10,000 
Issuance of common stock on July                                                                                      
 23, 1999 concurrent with the IPO                                                                                     
 upon conversion of promissory                                                                                        
 notes plus accrued interest of                                                                                       
 $720 at $10.00 per share (net of                                                                                     
 issuance costs of $1).............  2,672    3      25,612    --      --       --         --           --     25,615 
Issuance of common stock on August                                                                                    
 3, 1999 and August 25, 1999 from                                                                                     
 the over- allotment exercise by                                                                                      
 underwriters at $13.00 per share                                                                                     
 (net of issuance costs of $1).....    675    1       8,141    --      --       --         --           --      8,142 
Exercise of common stock options...     40   --         148    --      --       --         --           --        148 
Interest on notes receivable from                                                                                     
 stockholders......................     --   --         150    --      --       --       (150)          --         -- 
Deferred compensation related to                                                                                      
 stock options.....................     --   --         679    --      --     (679)        --           --         -- 
Amortization of deferred                                                                                              
 compensation......................     --   --          --    --      --    1,341         --           --      1,341 
Net Loss...........................     --   --          --    --      --       --         --      (28,072)   (28,072)
                                    ------  ---    --------   ---    ----  -------    -------     --------   -------- 
Balance at December 31, 1999....... 34,832  $35    $146,592   802    $128  $(2,591)   $(2,638)    $(43,149)  $ 98,377 
                                    ======  ===    ========   ===    ====  =======    =======     ========   ======== 

The accompanying notes are an integral part of these statements.  

I-6 

DEFM14A
274th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 274th
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Changes in Stockholders' Equity for the  
Period from March 21, 1997 (inception) to December 31, 1998 and for 
Years ended December 31, 1999, 2000 and 2001 and  
for the Three-Month Period ended March 31, 2002 (unaudited) 
(In thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                                                                                                     Deficit  
                                                                                             Notes                 Accumulated
                                          Common Stock  Additional   Warrants              Receivable    Foreign     During   
                                         --------------  Paid-in   ------------  Deferred     from      Currency   Development
                                         Shares  Amount  Capital   Shares Amount  Comp.   Stockholders Translation    Stage   
                                         ------  ------ ---------- ------ ------ -------- ------------ ----------- -----------
                                                                                                                              
Balance at January 1, 2000.............. 34,832   $35    $146,592    802  $ 128  $(2,591)   $(2,638)      $ --      $(43,149) 
Issuance of common stock on April 30,                                                                                         
  2000 pursuant to the Employee Stock                                                                                         
  Purchase Plan at $11.05 per share.....     18    --         199     --     --       --         --         --            --  
Issuance of common stock on October 31,                                                                                       
  2000 pursuant to the Employee Stock                                                                                         
  Purchase Plan at $11.05 per share.....     10    --         115     --     --       --         --         --            --  
Exercise of common stock options........  1,301     1       5,674     --     --       --         --         --            --  
Exercise of common stock warrants.......    802     1         929   (802)  (128)      --         --         --            --  
Common stock surrendered by                                                                                                   
  stockholders for payment of principal                                                                                       
  and interest..........................    (41)   --        (170)    --     --       --        170         --            --  
Repayment of notes from stockholders....     --    --          --     --     --       --        804         --            --  
Interest on notes receivable............     --    --         276     --     --       --       (276)        --            --  
Amortization of deferred compensation...     --    --          --     --     --    1,386         --         --            --  
Deferred compensation related to stock                                                                                        
  and option issuances, net of                                                                                                
  terminations..........................     25    --         325     --     --     (325)        --         --            --  
Net loss................................     --    --          --     --     --       --         --         --       (37,364) 
                                         ------   ---    --------   ----  -----  -------    -------       ----      --------  
Balance at December 31, 2000............ 36,947   $37    $153,940     --  $  --  $(1,530)   $(1,940)      $ --      $(80,513) 
                                         ======   ===    ========   ====  =====  =======    =======       ====      ========  
                                                                [Download Table]


                                          Total   
                                           SH's   
                                          Equity  
                                         -------- 
                                                  
Balance at January 1, 2000.............. $ 98,377 
Issuance of common stock on April 30,             
  2000 pursuant to the Employee Stock             
  Purchase Plan at $11.05 per share.....      199 
Issuance of common stock on October 31,           
  2000 pursuant to the Employee Stock             
  Purchase Plan at $11.05 per share.....      115 
Exercise of common stock options........    5,675 
Exercise of common stock warrants.......      802 
Common stock surrendered by                       
  stockholders for payment of principal           
  and interest..........................       -- 
Repayment of notes from stockholders....      804 
Interest on notes receivable............       -- 
Amortization of deferred compensation...    1,386 
Deferred compensation related to stock            
  and option issuances, net of                    
  terminations..........................       -- 
Net loss................................  (37,364)
                                         -------- 
Balance at December 31, 2000............ $ 69,994 
                                         ======== 

The accompanying notes are an integral part of these statements.  

I-7 

DEFM14A
275th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 275th
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Changes in Stockholders' Equity for the  
Period from March 21, 1997 (inception) to December 31, 1998 and for 
Years ended December 31, 1999, 2000 and 2001 and  
for the Three-Month Period ended March 31, 2002 (unaudited) 
(In thousands, except per share data) 

                                                        [Enlarge/Download Table]

                                                                                                         Deficit                
                                                                                  Note                 Accumulated              
                                                  Additional                   Receivable    Foreign     During        Total    
                                    Common Stock   Paid-in   Warrants Deferred    from      Currency   Development Stockholders'
                                    Shares Amount  Capital    Amount   Comp.   Stockholder Translation    Stage       Equity    
-                                   ------ ------ ---------- -------- -------- ----------- ----------- ----------- -------------
                                                                                                                                
Balance at January 1, 2001......... 36,947  $37    $153,940      $--  $(1,530)   $(1,940)      $--       $(80,513)    $69,994   
Issuance of common stock under                                                                                                  
  ESPP on April 30 and October 31,                                                                                              
  2001 at $9.22 and $9.51 per                                                                                                   
  share, respectively..............     35   --         288       --       --         --        --             --         288   
Issuance of 1,345 shares of common                                                                                              
  stock to Acqua Wellington for                                                                                                 
  cash in five transactions priced                                                                                              
  from $9.60 to $10.16 per share                                                                                                
  net of issuance costs............  1,344    1      13,163       --       --         --        --             --      13,164   
Issuance of 4,870 shares of common                                                                                              
  stock and warrants to purchase                                                                                                
  753 shares of common stock on                                                                                                 
  May 16 and 17, 2001 at $9.45 per                                                                                              
  shares, net of issuance costs....  4,870    5      37,507    5,134       --         --        --             --      42,646   
Issuance of 814 shares of common                                                                                                
  stock on October 31, 2001 at                                                                                                  
  $10.218 per share to purchase                                                                                                 
  certain therapeutic assets of                                                                                                 
  IBEX.............................    814    1       8,323       --       --         --        --             --       8,324   
Issuance of stock options on                                                                                                    
  October 31, 2001 in connection                                                                                                
  with the IBEX acquisition........     --   --         291       --       --         --        --             --         291   
Issuance of 8,050 shares of common                                                                                              
  stock on December 13, 2001 in a                                                                                               
  public offering at $12 per share                                                                                              
  net of issuance costs............  8,050    8      90,363       --       --         --        --             --      90,371   
Exercise of common stock options...    342   --       1,258       --       --         --        --             --       1,258   
Interest accrued on notes                                                                                                       
  receivable.......................     --   --          97       --       --        (97)       --             --          --   
Foreign currency translation.......     --   --          --       --       --         --       (13)            --         (13)  
Amortization of deferred                                                                                                        
  compensation.....................     --   --          --       --      831         --        --             --         831   
Net loss...........................     --   --          --       --       --         --        --        (67,606)    (67,606)  
                                    ------  ---    --------   ------  -------    -------      ----      ---------    --------   
Balance at December 31, 2001....... 52,402  $52    $305,230   $5,134    $(699)   $(2,037)     $(13)     $(148,119)   $159,548   
                                    ======  ===    ========   ======  =======    =======      ====      =========    ========   

The accompanying notes are an integral part of these statements.  

I-8 

DEFM14A
276th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 276th
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Changes in Stockholders' Equity for the  
Period from March 21, 1997 (inception) to December 31, 1998 and for 
Years ended December 31, 1999, 2000 and 2001 and  
for the Three-Month Period ended March 31, 2002 (unaudited) 
(In thousands, except per share data) 

                                                        [Enlarge/Download Table]


                                                                                                          Deficit                
                                                                                  Notes                 Accumulated              
                                    Common Stock  Additional                    Receivable    Foreign     During        Total    
                                    -------------  Paid-in            Deferred     from      Currency   Development Stockholders'
                                    Shares Amount  Capital   Warrants  Comp.   Stockholders Translation    Stage       Equity    
                                    ------ ------ ---------- -------- -------- ------------ ----------- ----------- -------------
                                                                                                                                 
Balance at January 1, 2002......... 52,402  $52    $305,230   $5,134   $(699)    $(2,037)      $(13)     $(148,119)   $159,548   
Exercise of common stock options...     70   --         375       --      --          --         --             --         375   
Issuance of 885 shares of common                                                                                                 
  stock issued to Synapse                                                                                                        
  shareholders to purchase Synapse                                                                                               
  on March 21, 2002 at $11.50 per                                                                                                
  share............................    885    1      10,180       --      --          --         --             --      10,181   
Issuance of common stock options                                                                                                 
  and common stock warrants in                                                                                                   
  connection with the Synapse                                                                                                    
  transaction on March 21, 2002....     --   --         561       85      --          --         --             --         646   
Other non-cash compensation........     --   --         229       --      --          --         --             --         229   
Interest on notes receivable from                                                                                                
  stockholders.....................     --   --          23       --      --         (27)        --             --          (4)  
Amortization of deferred                                                                                                         
  compensation.....................     --   --          --       --     209         (23)        --             --         186   
Additional issuance costs related                                                                                                
  to December 2001 offering........     --   --        (129)      --      --          --         --             --        (129)  
Foreign currency translation.......     --   --          --       --      --          --        (61)            --         (61)  
Net loss...........................     --   --          --       --      --          --         --        (26,603)    (26,603)  
                                    ------  ---    --------   ------   -----     -------       ----      ---------    --------   
Balance at March 31, 2002                                                                                                        
  (unaudited)...................... 53,357  $53    $316,469   $5,219   $(490)    $(2,087)      $(74)     $(174,722)   $144,368   
                                    ======  ===    ========   ======   =====     =======       ====      =========    ========   

The accompanying notes are an integral part of these statements.  

I-9 

DEFM14A
277th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 277th
BioMarin Pharmaceutical Inc. and Subsidiaries 
(a development-stage company) 
Consolidated Statements of Cash Flows 
for the Years Ended December 31, 1999, 2000, 2001, for the Three Month Period 
Ended March 31, 2002  
and for the Period from March 21, 1997 (inception) to March 31, 2002  
(In thousands)  

                                                        [Enlarge/Download Table]

                                                                                              Three Month                   
                                                                    December 31,             Period Ended     March 21, 1997
                                                           -----------------------------  ------------------  (inception) to
                                                                                          March 31, March 31,   March 31,   
                                                             1999      2000       2001      2001      2002         2002     
                                                           --------  --------  ---------  --------- --------- --------------
                                                                                                     (unaudited)            
                                                                                                                            
Cash flows from operating activities:                                                                                       
   Net loss from continuing operations.................... $(26,371) $(35,615) $ (57,428)  $(9,083) $(26,584)   $(160,703)  
   Adjustments to reconcile net loss to net cash used in                                                                    
    operating activities:                                                                                                   
      In-process research and development.................       --        --     11,647        --    10,286       21,933   
      Facility closure....................................       --     3,791         --        --        --        3,791   
      Depreciation........................................    4,074     4,347      6,173     1,162     1,852       16,759   
      Amortization of deferred compensation...............    1,341     1,386        831       209       209        3,970   
      Loss from BioMarin/Genzyme LLC......................    6,973    12,635     18,509     3,799     6,160       44,324   
      Other non-cash compensation.........................       --        --         --        --       206          206   
   Changes in operating assets and liabilities:                                                                             
      Due from BioMarin/Genzyme LLC.......................     (861)     (519)    (1,297)   (1,587)   (2,815)      (5,911)  
      Other current assets................................      383      (720)      (299)      (92)    2,078          812   
      Note receivable from officer........................       --        --       (889)       --      (300)      (1,189)  
      Deposits............................................      (72)     (182)      (101)     (150)       --         (434)  
      Accounts payable....................................    1,754     1,552       (363)   (3,122)   (1,323)       3,060   
      Accrued liabilities.................................    1,326       148        247      (165)    2,177        4,696   
                                                           --------  --------  ---------   -------  --------    ---------   
      Net cash used in continuing operations..............  (11,453)  (13,177)   (22,970)   (9,029)   (8,054)     (68,686)  
      Net cash provided by (used in) discontinued                                                                           
       operations.........................................   (1,487)      444        (95)     (125)     (279)         470   
                                                           --------  --------  ---------   -------  --------    ---------   
         Net cash used in operating activities............  (12,940)  (12,733)   (23,065)   (9,154)   (8,333)     (68,216)  
                                                           --------  --------  ---------   -------  --------    ---------   
Cash flows from investing activities:                                                                                       
   Purchase of property and equipment.....................  (22,944)   (3,760)   (17,812)     (430)   (2,245)     (53,296)  
   Purchase of Synapse....................................       --        --         --        --    (1,028)      (1,028)  
   Investment in BioMarin/Genzyme LLC.....................   (6,709)  (13,696)   (18,172)   (2,100)   (4,504)     (43,813)  
   Purchase of IBEX therapeutic assets....................       --        --     (3,032)       --        --       (3,032)  
   Purchase (sale) of short-term investments..............  (37,597)   15,902    (94,898)   13,627    21,973      (96,596)  
                                                           --------  --------  ---------   -------  --------    ---------   
      Net cash used in continuing operations..............  (67,250)   (1,554)  (133,914)   11,097    14,196     (197,765)  
      Net cash used in discontinued operations............   (1,500)     (163)        --        --        --       (1,663)  
                                                           --------  --------  ---------   -------  --------    ---------   
         Net cash used in investing activities............  (68,750)   (1,717)  (133,914)   11,097    14,196     (199,428)  
                                                           --------  --------  ---------   -------  --------    ---------   
Cash flow from financing activities:                                                                                        
   Net proceeds from sale of common stock, net............   69,951        --    133,017       848        --      232,823   
   Proceeds from issuance of convertible notes............   25,615        --         --        --        --       25,615   
   Net proceeds from Acqua Wellington agreement...........       --        --     13,163        --        --       13,163   
   Proceeds from exercise of common stock options and                                                                       
    warrants..............................................      148     6,477      1,258       408       375        8,070   
   Net proceeds from notes payable........................       --        --      5,505        --        --        5,639   
   Repayment of notes payable.............................      (24)      (28)      (198)       (7)     (443)        (693)  
   Repayment of capital lease obligations.................       --        --        (43)       --       (15)         (58)  
   Receipts from notes receivable from stockholders.......       --       804         --        --       (45)         759   
   Issuance of common stock for ESPP, and other...........       --       314        288        --        --          602   
                                                           --------  --------  ---------   -------  --------    ---------   
         Net cash provided by financing activities........   95,690     7,567    152,990     1,249      (128)     285,920   
                                                           --------  --------  ---------   -------  --------    ---------   
Effect of foreign currency translation on cash............       --        --        (13)       --       (61)         (74)  
                                                           --------  --------  ---------   -------  --------    ---------   
         Net increase (decrease) in cash..................   14,000    (6,883)    (4,002)    3,192     5,674       18,202   
Cash and cash equivalents:                                                                                                  
   Beginning of period....................................    9,413    23,413     16,530    16,530    12,528           --   
                                                           --------  --------  ---------   -------  --------    ---------   
   End of period.......................................... $ 23,413  $ 16,530  $  12,528   $19,722  $ 18,202    $  18,202   
                                                           ========  ========  =========   =======  ========    =========   

The accompanying notes are an integral part of these statements.  

I-10  

DEFM14A
278th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 278th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 
(A DEVELOPMENT-STAGE COMPANY) 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  

1.  NATURE OF OPERATIONS AND BUSINESS RISKS:                                    

BioMarin Pharmaceutical Inc. (the Company or BioMarin) is a               
biopharmaceutical company specializing in the development of enzyme therapies   
for debilitating life-threatening chronic genetic diseases and other diseases   
and conditions. Since March 21, 1997 (inception), the Company has devoted       
substantially all of its efforts to research and development activities,        
including preclinical studies and clinical trials, the establishment of         
laboratory, clinical and commercial manufacturing facilities, clinical          
manufacturing, and related administrative activities.                           

The Company was incorporated on October 25, 1996 in the state of Delaware 
and first began business on March 21, 1997 (inception) as a wholly-owned        
subsidiary of Glyko Biomedical Ltd. (GBL). Subsequently, BioMarin has issued    
stock to outside investors in a series of transactions, resulting in GBL's      
ownership of BioMarin's outstanding common stock being reduced to 22 percent at 
December 31, 2001.                                                              

On October 7, 1998, the Company acquired Glyko, Inc., a wholly-owned      
subsidiary of GBL, in a transaction valued at $14.5 million. The transaction    
was accounted for as a purchase and resulted in Glyko, Inc. becoming a          
wholly-owned subsidiary of the Company. Glyko, Inc. provides products and       
services that perform sophisticated carbohydrate analysis for research          
institutions and commercial laboratories.                                       

In December 2001, the Company decided to close the carbohydrate analytical
business portion of Glyko, Inc. which provided all of Glyko, Inc.'s revenues.   
Accordingly, the Company recorded a Glyko, Inc. closure expense of $7.9 million 
in the 2001 consolidated statements of operations. This charge consisted        
primarily of an impairment reserve against the unamortized balance of goodwill  
and other intangible assets related to the acquisition of Glyko, Inc. The       
majority of the Glyko, Inc. employees will be incorporated into the BioMarin    
business and such employees will continue to provide necessary analytic and     
diagnostic support to the Company's therapeutic products.                       

The net loss of Glyko, Inc.'s operations is included in the accompanying  
consolidated statements of operations as loss from discontinued operations.     
Revenues from Glyko, Inc. for the years ended December 31, 1999, 2000 and 2001, 
the three month period ended March 31, 2002 (unaudited) and March 31, 2001      
(unaudited) and the period from March 21, 1997 (inception) to March 31, 2002    
(unaudited) were $1.7 million, $2.6 million, $2.7 million, $0.8 million, $0.7   
million and $8.2 million respectively.                                          

In September 2001, the Company formed BioMarin Enzymes, Inc. as a         
wholly-owned subsidiary incorporated in Delaware and BioMarin Pharmaceutical    
Nova Scotia Company, an unlimited liability company formed in Nova Scotia and a 
wholly-owned subsidiary of BioMarin Enzymes, Inc. Both entities were formed to  
purchase the therapeutic assets of IBEX Technologies Inc. and its subsidiaries  
on October 31, 2001.                                                            

  On October 31, 2001, the Company purchased from IBEX Technologies Inc. (TSE:
IBT) and its subsidiaries the development activities associated with the IBEX   
therapeutic enzyme drug products (including Neutralase(TM) and Phenylase(TM))   
for $10.4 million, consisting of $2 million in cash and $8.4 million in         
BioMarin common stock. See also Note 3.                                         

Through March 31, 2002 (unaudited), the Company had accumulated losses    
during its development stage of approximately $174.7 million. Based on current  
plans, management expects to incur further losses for the foreseeable future.   
Management believes that the Company's cash, cash equivalents and short-term    
investment balances at March 31, 2002 will be sufficient to meet the Company's  
obligations through the end of 2003.                                            

I-11  

DEFM14A
279th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 279th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Business Risks--The Company is exposed to the following risks:            

.   There can be no assurance that the Company's research and development   
 efforts will be successfully completed or that its product candidates
will be shown to be safe and effective.                             

.   Certain of the Company's product candidates rely on proprietary         
technology and patents owned by certain universities and other      
  institutions and licensed to BioMarin. These universities also provide
    research and development services. Cessation of relationships with these
    universities could significantly affect the Company's future operations.

.   In order to grow significantly, the Company must expand its efforts to  
 develop new products in pharmaceutical applications. The Company will
 also need to enhance manufacturing capabilities, to develop marketing
 capabilities, and/or enter into collaborative arrangements with third
parties having the capacity for such manufacturing or marketing.    

.   There can be no assurance that any of the Company's current or future   
    product candidates will be successfully developed, prove to be effective
    in clinical trials, receive required regulatory approvals, be capable of
being produced in commercial quantities at reasonable costs, gain   
reasonable reimbursement levels, or be successfully marketed.       

  In addition, the Company is subject to a number of risks, including the need
for additional financing, dependence on key personnel, small patient            
populations, patent protection, significant competition from larger             
organizations, dependence on corporate partners and collaborators, and expected 
restrictions on reimbursement, as well as other changes in the healthcare       
industry.                                                                       

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                                 

Basis of Presentation--These consolidated financial statements include the
accounts of BioMarin and its wholly-owned subsidiaries: Glyko, Inc., BioMarin   
Enzymes, Inc., BioMarin Nova Scotia and BioMarin Genetics, Inc. All significant 
intercompany transactions have been eliminated.                                 

Discontinued Operations--The decision to close Glyko, Inc. has resulted in
the operations of Glyko Inc. being classified as discontinued operations in the 
accompanying consolidated financial statements and, accordingly, the Company    
has segregated the assets and liabilities of the discontinued operations in the 
accompanying consolidated balance sheets. In addition, the Company has          
segregated the operating results in the accompanying consolidated statements of 
operations and has segregated cash flows from discontinued operations in the    
accompanying consolidated statements of cash flows for all periods presented.   
The notes to the accompanying consolidated financial statements reflect the     
classification of Glyko Inc. operations as discontinued operations.             

  The loss on disposal of discontinued operations included in the accompanying
consolidated statement of operations reflects certain adjustments required at   
December 31, 2001 primarily to record an impairment reserve against the         
unamortized goodwill related to Glyko, Inc. of approximately $7.8 million.      

Concentration of Credit Risk--Financial instruments that may potentially  
subject the Company to concentration of credit risk consist principally of      
cash, cash equivalents, and short-term investments. All cash, cash equivalents, 
and short-term investments are placed in financial institutions with strong     
credit ratings, which minimizes the risk of loss due to nonpayment. The Company 
has not experienced any losses due to credit impairment or other factors        
related to its financial instruments.                                           

I-12  

DEFM14A
280th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 280th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

  Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain    
estimates and assumptions that affect the reported amounts of assets and        
liabilities, disclosure of contingent assets and liabilities at the dates of    
the financial statements, and the reported amounts of revenues and expenses     
during the reporting period. Actual results could differ from those estimates.  

Cash and Cash Equivalents--For the consolidated statements of cash flows, 
the Company treats liquid investments with original maturities of less than     
three months when purchased as cash and cash equivalents.                       

Short-Term Investments--The Company records its investments as            
held-to-maturity. These investments are recorded at amortized cost. These       
securities are comprised mainly of Federal Agency investments, commercial paper 
and bank certificates of deposit.                                               

Investment in BioMarin/Genzyme LLC and Related Revenue--Under the terms of
the Company's joint venture agreement with Genzyme (see note 10), the Company   
and Genzyme have each agreed to provide 50 percent of the funding for the joint 
venture. All research and development, sales and marketing, and other           
activities performed by Genzyme and the Company on behalf of the joint venture  
are billed to the joint venture at cost. Any profits or losses of the joint     
venture are shared equally by the two parties. BioMarin provided $39.3 million  
in funding to the joint venture from inception through December 31, 2001.       

  During the years ended December 31, 1999, 2000, 2001 and for the period from
March 21, 1997 (inception) through December 31, 2001, the Company incurred      
expenses and billed $10.6 million, $19.4 million, $22.6 million and $54.4       
million, respectively, for services provided to the joint venture under the     
Agreement. Of these amounts, $5.3 million, $9.7 million, $11.3 million and      
$27.2 million, respectively, or 50 percent, was recognized as revenue in        
accordance with the Company's policy of recognizing revenue to the extent that  
research and development costs billed to the joint venture have been funded by  
Genzyme. At December 31, 2000, and 2001, the Company had receivables of $1.8    
million and $3.1 million, respectively, related to these billings.              

The Company accounts for its investment in the joint venture using the    
equity method. Accordingly, the Company records a reduction in its investment   
in the joint venture for its 50 percent share of the loss of the joint venture. 
The percentage of the costs incurred by the Company and billed to the joint     
venture that are funded by the Company (50 percent), is recorded as a credit to 
the Company's equity in the loss of the joint venture.                          

The following table summarizes the components of the Company's recorded   
equity in loss of BioMarin/Genzyme LLC (in thousands):                          

                                                        [Enlarge/Download Table]

                                                                                                    March 21, 1997
                                                                         Years ended December 31,   (inception) to
                                                                       ---------------------------   December 31, 
                                                                         1999     2000      2001         2001     
                                                                       -------  --------  --------  --------------
                                                                                                                  
50 percent of joint venture net loss.................................. $(6,973) $(12,643) $(18,663)    $(39,163)  
50 percent of services billed by the Company to joint venture.........   5,300     9,731    11,330       27,198   
                                                                       -------  --------  --------     --------   
                                                                       $(1,673) $ (2,912) $ (7,333)    $(11,965)  
                                                                       =======  ========  ========     ========   

I-13  

DEFM14A
281st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 281st
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

At December 31, 2001 the summarized assets and liabilities of the joint   
venture and its results of operations from inception to December 31, 2001 are   
as follows (in thousands):                                                      

                                                                [Download Table]
                                                          
Assets............................................ $ 7,628
                                                   =======
Liabilities....................................... $ 5,338
Net equity........................................   2,290
                                                   -------
                                                   $ 7,628
                                                   =======
Cumulative net loss............................... $77,918
                                                   =======

Property and Equipment--Property and equipment are stated at cost.        
Depreciation is computed using the straight-line method over the related        
estimated useful lives. Significant additions and improvements are capitalized, 
while repairs and maintenance are charged to expense as incurred.               

  As of December 31, 2000 and 2001, and March 31, 2002, property and equipment
consisted of the following (in thousands):                                      

                                                        [Enlarge/Download Table]

                                      December 31,                                        
                                   -----------------   March 31,                          
             Category                2000     2001       2002      Estimated Useful Lives 
             --------              -------  --------  ----------- ------------------------
                                                      (unaudited)                         
                                                                                          
Computer hardware and software.... $   678  $  1,532   $  1,820           3 years         
Office furniture and equipment....   1,056     1,557      1,622           5 years         
Manufacturing/Laboratory Equipment   9,323    11,769     11,918           5 years         
Leasehold improvements............  16,685    30,886     32,735   Shorter of life of asset
                                                                       or lease term      
Construction in progress..........   1,048     1,064      1,064                           
                                   -------  --------   --------                           
                                    28,790    46,808     49,159                           
Less: Accumulated depreciation....  (8,075)  (14,248)   (16,100)                          
                                   -------  --------   --------                           
Total property and equipment, net. $20,715  $ 32,560   $ 33,059                           
                                   =======  ========   ========                           

Depreciation expense for the years ended December 31, 1999, 2000 and 2001 
and for the three month period ended March 31, 2001 and 2002 (unaudited) and    
for the period March 21, 1997 (inception) to March 31, 2002, (unaudited) was,   
$4.1 million, $4.3 million, $6.2 million, $1.2 million, $1.9 million and $16.8  
million, respectively.                                                          

 Goodwill and Other Intangible Assets--In connection with the acquisition of
Glyko, Inc. in 1998, the Company recorded intangible assets of $11.7 million.   
Additional intangible assets of $891,000 were recorded in connection with the   
acquisition by Glyko, Inc. of the key assets of the bio-chemical research       
reagent division of Oxford GlycoSciences Plc. (OGS), a company not related to   
Glyko, Inc. During 2000, the Company revised its estimate of the useful life of 
these intangible assets downward to 7 years; the effect of this change          
increased amortization expense in 2000. As indicated in Note 1, the Company     
recorded an impairment reserve against the unamortized balance of $7.8 million  
at December 31, 2001 as a result of the Company's decision to close the         
business.                                                                       

Impairment of Long-Lived Assets--The Company regularly reviews long-lived 
assets and identifiable intangibles whenever events or circumstances indicate   
that the carrying amount of such assets may not be fully recoverable. The       
Company evaluates the recoverability of long-lived assets by measuring the      
carrying amount of the assets against the estimated undiscounted future cash    
flows associated with them. At the time such evaluations indicate that the      
future undiscounted cash flows of certain long-lived assets are not sufficient  
to recover the carrying value of such assets, the assets are adjusted to their  
fair values.                                                                    

I-14  

DEFM14A
282nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 282nd
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Accrued Liabilities--As of December 31, 2000 and 2001, accrued liabilities
consisted of the following:                                                     

                                                                [Download Table]

                                                   December 31, 
                                                   -------------
                                                    2000   2001 
                                                   ------ ------
                                                                
Vacation.......................................... $  365 $  602
Construction in progress..........................    225     --
ESPP/401K.........................................    167    528
Other.............................................  1,194  1,068
                                                   ------ ------
   Total.......................................... $1,951 $2,198
                                                   ====== ======

Revenue Recognition--Revenue from the joint venture is recognized to the  
extent that research and development costs billed by the Company have been      
funded by Genzyme.                                                              

Research and Development--Research and development expenses include the   
expenses associated with contract research and development provided by third    
parties, research and development provided in connection with the joint venture 
including manufacturing, clinical and regulatory costs, and internal research   
and development costs. All research and development costs are expensed as       
incurred.                                                                       

Net Income (Loss) per Share--Net income (loss) per share is calculated by 
dividing net income (loss) by the weighted average common shares outstanding    
during the period. Diluted net income per share is calculated by dividing net   
income by the weighted average common shares outstanding and potential common   
shares during the period. Potential common shares include dilutive shares       
issuable upon the exercise of outstanding common stock options, warrants, and   
contingent issuances of common stock. For periods in which the Company has      
losses (all periods presented), such potential common shares are excluded from  
the computation of diluted net loss per share, as their effect is antidilutive. 

Potentially dilutive securities include (in thousands):                   

                                                                [Download Table]

                                                     December 31,   
                                                   -----------------
                                                   1999  2000  2001 
                                                   ----- ----- -----
                                                                    
Options to purchase common stock.................. 5,450 5,539 7,767
Warrants to purchase common stock.................   802    --   753
                                                   ----- ----- -----
   Total.......................................... 6,252 5,539 8,520
                                                   ===== ===== =====

Segment Reporting--The Company operates in two segments. The Analytic and 
Diagnostic segment represents the operations of Glyko, Inc. which involve the   
manufacture and sale of analytic and diagnostic products (See Note 1 regarding  
closure of Glyko, Inc. and the associated discontinued operations treatment).   
The Pharmaceutical segment represents the research and development activities   
related to the development and commercialization of carbohydrate enzyme         
therapeutics. Segment information for the Analytic and Diagnostic segment is    
not presented as the segment has been discontinued and, thus, disclosure of     
segment information is not required.                                            

  Recent Accounting Pronouncements--On June 29, 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards       
(SFAS) No. 141, Business Combinations, and SFAS No. 142, Goodwill and           
Intangible Assets. Major provisions of these Statements are as follows: all     
business combinations initiated after June 30, 2001 must use the purchase       
method of accounting; intangible assets acquired in a business combination must 
be recorded separately; all acquired goodwill must be assigned to               

I-15  

DEFM14A
283rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 283rd
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

reporting units for purposes of impairment testing and segment reporting;       
effective January 1, 2002, goodwill and intangible assets with indefinite lives 
will not be amortized but will be tested for impairment annually using a fair   
value approach; other intangible assets will continue to be valued and          
amortized over their estimated lives; in-process research and development       
acquired in business combinations will continue to be written off immediately.  
Management does not expect this standard to have a material impact on the       
Company's consolidated financial position or results of operations.             

  In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." Management does not expect this standard to have a material       
impact on the Company's consolidated financial position or results of           
operations.                                                                     

  In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." SFAS No. 144 broadens the presentation of    
discontinued operations to include more transactions and eliminates the need to 
accrue for future operating losses. Additionally, SFAS No. 144 prohibits the    
retroactive classification of assets as held for sale and requires revisions to 
the depreciable lives of long-lived assets to be abandoned. SFAS No. 144 will   
be effective January 1, 2002 for the Company. Management does not expect this   
standard to have a material impact on the Company's consolidated financial      
position or results of operations.                                              

Reclassifications--Certain items in the prior year consolidated financial 
statements have been reclassified to conform to the current year presentation.  

3.  PURCHASE OF IBEX THERAPEUTIC ASSETS:                                        

  On October 31, 2001, the Company purchased from IBEX Technologies Inc. (TSE:
IBT) and its subsidiaries the development activities associated with the IBEX   
therapeutic enzyme drug products (including Neutralase and Phenylase). The      
purchase agreement called for a total purchase price of $10.4 million,          
consisting of $2 million in cash and $8.4 million of common stock. In           
accordance with the purchase agreement, the number of common shares was based   
on the average share price from September 5, 2001 to October 8, 2001, which     
resulted in the issuance of 814,467 shares. In connection with the transaction, 
the Company issued options to purchase 43,861 shares of the Company's common    
stock. These options were valued using the Black-Scholes option pricing model   
and the resulting valuation of $291,000 was included as additional purchase     
price. The purchase agreement includes up to approximately $9.5 million in      
contingency payments upon regulatory approval of Neutralase and Phenylase,      
provided that approval occurs prior to October 31, 2006.                        

 The transaction did not meet the criteria of a business combination because
the assets acquired did not meet the definition of a business. EITF 98-3        
"Determining Whether a Nonmonetary Transaction Involves Receipt of Productive   
Assets or of a Business" defines a business. EITF 98-3 states that an acquired  
entity can only be treated as a business if it has significant business inputs  
(such as acquisition of raw materials for manufacturing purposes), business     
outputs (such as revenues) and a process in place to convert inputs to outputs. 
At the time IBEX was acquired, it only had in process the development of        
intellectual property that might be used to develop therapeutic enzyme drug     
products. Commercialization of any products is not anticipated for several      
years. Accordingly, the assets acquired from IBEX have no business outputs      
because their technological feasibility has not yet been established and the    
technology has no alternative uses. As a result, all of the purchase price plus 
related expenses totaling $11.7 million was attributed to in-process research   
and development and was expensed in the accompanying consolidated statements of 
operations.                                                                     

I-16  

DEFM14A
284th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 284th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

4.  STOCKHOLDERS' EQUITY:                                                       

  Common Stock and Warrants--The Company closed a number of private placements
in 1997 and 1998. In connection with these placements, an entity with which the 
former chief executive officer and chairman of the board is affiliated was      
issued a total of 899,500 shares (valued at $1.4 million) and warrants (valued  
at $0.1 million) to purchase an additional 801,500 shares of common stock at an 
exercise price of $1 per share. These issuances were made for brokerage         
services rendered in connection with these placements and were accounted for as 
a cost of raising capital. The warrants were exercised in August 2000.          

 In July 1999, the Company completed its initial public offering raising net
proceeds (including the exercise of the over-allotment) of $60 million.         

 On May 16, 2001, the Company sold 4,763,712 shares of common stock at $9.45
per share and, for no additional consideration, issued three-year warrants to   
purchase 714,554 shares of common stock at an exercise price of $13.10 per      
share and received net proceeds of $41.5 million. Also, on May 17, 2001, a fund 
managed by Acqua Wellington purchased 105,821 shares of common stock and        
received warrants to purchase 15,873 shares of common stock on the same price   
and terms as the May 16, 2001 transaction; the Company received net proceeds of 
$1 million. The Company allocated a portion of the proceeds to warrants in the  
consolidated balance sheet based on the estimated fair value of the warrants.   
The fair value of the warrants was calculated using the Black-Scholes option    
pricing model.                                                                  

In August 2001, the Company signed an amended agreement with Acqua        
Wellington North American Equities Fund Ltd. (Acqua Wellington) for an equity   
investment in the Company. The agreement allows for the purchase of up to $27.7 
million. Under the terms of the agreement, the Company will have the option to  
request that Acqua Wellington invest in the Company through sales of registered 
common stock at a small discount to market price. The maximum amount that the   
Company may request to be bought in any one month is dependent upon the market  
price of the stock (or an amount that can be mutually agreed-upon by both       
parties) and is referred to as the "Draw Down Amount." Subject to certain       
conditions, Acqua Wellington is obligated to purchase this amount if requested  
to do so by the Company. In addition, the Company may, at its discretion, grant 
a "Call Option" to Acqua Wellington for an additional investment in an amount   
up to the "Draw Down Amount" which Acqua Wellington may or may not choose to    
exercise. During 2001, Acqua Wellington purchased 1,344,194 shares for $13.5    
million ($13.2 million net of issuance costs). Under this agreement, Acqua      
Wellington may also purchase stock and receive similar terms of any other       
equity financing by the Company.                                                

On December 13, 2001, the Company completed a follow-on public offering of
its common stock. In the offering, the Company sold 8,050,000 shares, including 
1,050,000 shares to cover over-allotments, at a price to the public of $12.00   
per share. The net proceeds to the Company were approximately $90.4 million.    

Notes Receivable from Stockholders--These originated from the October 1997
issuance of 2.5 million shares of Founders' Stock to three officers. The notes  
carried an interest rate of 6%; since this was less than the then-market rate   
of 9%, an interest discount and related deferred compensation of $200,000 was   
recorded. The deferred compensation was recognized as an expense over the term  
of the notes.                                                                   

The notes were originally due on March 31, 2001 and are secured by the    
underlying stock. The notes contained buy-back and vesting provisions. Two of   
the three executives have left the Company. For the first officer, the Company  
repurchased 33,334 of his shares at his original purchase price and reduced his 
note balance by the same amount. This officer repaid the remaining balance and  
interest in 2000. The second and third officers have not yet fully repaid their 
loans but repayment is expected in 2002 including interest that is continuing   
to be accrued.                                                                  

I-17  

DEFM14A
285th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 285th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

 The notes are classified in the accompanying consolidated balance sheets as
a reduction of stockholders' equity.                                            

Deferred Compensation--In connection with certain stock option and stock  
grants to employees from 1998 to 2000, the Company recorded deferred            
compensation totaling $4.2 million, which is being amortized over the estimated 
service periods of the grantees. Amortization expense recognized during the     
years ended December 31, 1999, 2000, and 2001 was $1.3 million, $1.4 million    
and $0.8 million, respectively.                                                 

5.  STOCK OPTION PLANS:                                                         

The Board of Directors and stockholders have approved two plans:          

.   The 1997 Stock Plan (the 1997 Plan) provides for the grant of stock     
options and the issuance of common stock to employees, officers,    
     directors and consultants. As of December 31, 2001, 9,172,451 shares were
reserved for issuance under the 1997 Plan.                          

.   The 1998 Director Option Plan (the Director Plan) provides for the grant
of stock options and the issuance of common stock to non-employee   
  directors. As of December 31, 2001, options to purchase 185,000 shares
   were outstanding and options to purchase 500,000 shares were authorized
by the Director Plan.                                               

Options currently outstanding under the 1997 Plan and 1998 Director Plan  
(the Plans) generally have vesting schedules of up to four years. Options       
terminate from 5-10 years from the date of grant or 90 days after termination   
of employment.                                                                  

The Company accounts for option grants in accordance with APB 25. Had     
compensation cost for option grants to employees under the Plans been           
determined consistent with the fair value provisions of SFAS No. 123, the       
effect on the Company's net loss would have been as follows:                    

                                                        [Enlarge/Download Table]

                                                                                  Period from  
                                                                                 March 21, 1997
                                                     Years ended December 31,    (Inception) to
                                                   ----------------------------   December 31, 
                                                     1999      2000      2001         2001     
                                                   --------  --------  --------  --------------
                                                                                               
Net loss as reported.............................. $(28,072) $(37,364) $(67,606)   $(148,119)  
Pro forma effect of SFAS No. 123..................   (1,074)   (5,412)  (13,875)     (20,544)  
                                                   --------  --------  --------    ---------   
Pro forma net loss................................ $(29,146) $(42,776) $(81,481)   $(168,663)  
                                                   ========  ========  ========    =========   
Net loss per common share as reported............. $  (0.94) $  (1.04) $  (1.65)   $   (5.22)  
                                                   ========  ========  ========    =========   
Pro forma loss per common share................... $  (0.97) $  (1.19) $  (1.98)   $   (5.94)  
                                                   ========  ========  ========    =========   

I-18  

DEFM14A
286th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 286th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

A summary of the status of the Company's Plans is as follows:             

                                                        [Enlarge/Download Table]

                                                               Weighted                             
                                                               Average  Exercisable Weighted Average
                                                     Option    Exercise  at End of   Fair Value of  
                                                     Shares     Price      Year     Options Granted 
                                                   ----------  -------- ----------- ----------------
                                                                                                    
Outstanding at March 21, 1997.....................         --                                       
                                                   ----------                                       
   Granted........................................    297,000   $ 1.00                   $ 0.22     
                                                   ----------                                       
Outstanding at December 31, 1997..................    297,000     1.00     232,000                  
                                                   ==========            =========                  
   Granted........................................  2,507,660     4.18                   $ 2.40     
   Exercised......................................     (1,973)    1.00                              
   Canceled.......................................     (1,447)    1.00                              
                                                   ----------   ------   ---------       ------     
Outstanding at December 31, 1998..................  2,801,240     3.85     761,609                  
                                                   ==========            =========                  
   Granted........................................  2,877,430    11.35                   $ 8.80     
   Exercised......................................    (40,148)    3.69                              
   Canceled.......................................   (188,536)    9.28                              
Outstanding at December 31, 1999..................  5,449,986     7.59   1,922,041                  
                                                   ==========            =========                  
   Granted........................................  1,881,310    15.83                   $13.27     
   Exercised...................................... (1,300,532)    4.36                              
   Canceled.......................................   (491,506)   11.70                              
Outstanding at December 31, 2000..................  5,539,258    10.92   2,067,302                  
                                                   ==========            =========                  
   Granted........................................  2,844,206    10.80                   $ 8.22     
   Exercised......................................   (343,560)    3.72                              
   Canceled.......................................   (273,226)   14.21                              
                                                   ----------   ------   ---------       ------     
Outstanding at December 31, 2001..................  7,766,678    11.18   3,682,150                  
                                                   ==========            =========                  

  There were 1,048,661 and 219,560 options available for grant under the Plans
at December 31, 2000 and 2001, respectively.                                    

  As of December 31, 2001, the options outstanding consisted of the following:

                                                        [Enlarge/Download Table]

                         Options Outstanding                                 Options Exercisable        
--------------------------------------------------------------------- ----------------------------------
Range of Exercise Number of Options Weighted Average Weighted Average Number of Options Weighted Average
     Prices          Outstanding    Contractual Life  Exercise Price     Exercisable     Exercise Price 
----------------- ----------------- ---------------- ---------------- ----------------- ----------------
                                                                                                        
$0.00 to $3.50...       103,523           0.7             $ 1.07            103,523          $ 1.07     
$3.50 to $7.00...     1,699,903           4.0             $ 5.35          1,376,818          $ 5.24     
$7.01 to $10.50..     1,644,037           8.9             $ 9.43            539,178          $ 9.45     
$10.51 to $14.00.     3,030,947           7.1             $12.60          1,026,982          $12.68     
$14.01 to $17.50.       691,394           4.6             $15.83            358,365          $15.81     
$17.51 to $21.00.       265,874           6.5             $19.40            132,621          $19.66     
$21.01 to $24.50.       220,000           8.1             $21.63             93,541          $21.96     
$24.51 to $28.00.        96,000           3.2             $25.88             43,935          $25.90     
$28.00 to $31.50.        15,000           3.2             $31.25              7,187          $31.25     
                      ---------                                           ---------                     
                      7,766,678                                           3,682,150                     
                      =========                                           =========                     

I-19  

DEFM14A
287th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 287th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

  The following summarizes the assumptions used to determine the fair value of
each option using the Black-Scholes option pricing model:                       

                                                        [Enlarge/Download Table]

                                                                 Dividend                   
                 Dates of Grant                    Interest Rate  Yield    Life   Volatility
                 --------------                    ------------- -------- ------- ----------
                                                                                            
Inception to July 22, 1999 (pre-IPO).............. 4.6% to 5.7%   0.00%   4 years      0%   
July 22, 1999 to December 31, 1999................ 5.8% to 6.1%   0.00%   4 years     39%   
January 1, 2000 to December 31, 2000.............. 4.6% to 6.8%   0.00%   4 years    105%   
January 1, 2001 to December 31, 2001.............. 3.9% to 4.9%   0.00%   4 years     76%   

6.  NOTE PAYABLE:                                                               

During December 2001, the Company entered into three separate agreements  
with General Electric Capital Corporation for secured loans totaling $5.5       
million. The notes bear interest (ranging from 9.1% to 9.31%) and are secured   
by certain manufacturing and laboratory equipment not purchased with the        
proceeds. Additionally, one of the agreements is subject to a covenant that     
requires the Company to maintain a minimum unrestricted cash balance of $25     
million. Should the unrestricted cash balance fall below $25 million, the note  
is subject to prepayment, including prepayment penalties ranging from 1 percent 
to 4 percent.                                                                   

 Principal payments due on notes payable subsequent to December 31, 2001 are
as follows (in thousands):                                                      

                                                                [Download Table]
                                                         
2002.............................................. $1,525
2003..............................................  1,803
2004..............................................  1,948
2005..............................................    113
                                                   ------
                                                   $5,389
                                                   ======

7.  INCOME TAXES:                                                               

  The Company utilizes the asset and liability method of accounting for income
taxes. Under this method, deferred taxes are determined based on the difference 
between the financial statement and tax bases of assets and liabilities using   
tax rates expected to be in effect in the years in which the differences are    
expected to reverse.                                                            

The Company's primary temporary differences relate to items expensed for  
financial reporting purposes but not currently deductible for income tax        
purposes, consisting primarily of depreciable lives for property and equipment. 

 As of December 31, 2001, net operating loss carryforwards are approximately
$120.6 million and $57.6 million for federal and California income tax          
purposes, respectively. These net operating loss carryforwards include net      
operating losses of $12.6 million for federal purposes related to Glyko, Inc.   
These federal and state carryforwards expire beginning in the year 2011 and     
2004, respectively.                                                             

The Company also has research and development credits available to reduce 
future federal and California income taxes of approximately $3.2 million and    
$3.1 million, respectively, at December 31, 2001. These credits include credits 
related to Glyko, Inc. of approximately $0.7 million and $0.4 million for       
federal and California purposes, respectively. These federal and state          
carryforwards expire beginning in 2012 and 2013, respectively.                  

 The Company also has orphan drug credits available to reduce future federal
income taxes, if any, of approximately $13.6 million at December 31, 2001.      

I-20  

DEFM14A
288th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 288th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

The Tax Reform Act of 1986 contains provisions that may limit the net     
operating loss carryforwards and research and development credits available to  
be used in any given year should certain events occur, including sale of equity 
securities and other changes in ownership. The acquisition of Glyko, Inc. and   
the related issuance of stock represented a change of ownership under these     
provisions. As a result of this and the proposed exiting of the Glyko business, 
there can be no assurance that the Company will be able to utilize net          
operating loss carryforwards and credits before expiration.                     

The Company has a cumulative net operating loss carryforward since        
inception, resulting in net deferred tax assets of approximately $61.5 million. 
A valuation allowance has been placed on the net deferred tax assets to reduce  
them to an assumed net realizable value of zero.                                

8.  COMMITMENTS AND CONTINGENCIES:                                              

 Lease Commitments--The Company leases office space and research and testing
laboratory space in various facilities under operating agreements expiring at   
various dates through 2010. Future minimum lease payments for the years ended   
December 31 are as follows (in thousands):                                      

                                                                [Download Table]
                                                          
2002.............................................. $ 2,548
2003..............................................   2,566
2004..............................................   2,392
2005..............................................   2,093
2006..............................................   1,924
Thereafter........................................   5,715
                                                   -------
   Total.......................................... $17,238
                                                   =======

Rent expense for the years ended December 31, 1999, 2000 and 2001, and for
the period from March 21, 1997 (inception), to December 31, 2001, was $1.1      
million, $1.5 million, $2.2 million and $5.2 million, respectively.             

Research and Development Funding and Technology Licenses--The Company uses
experts and laboratories at universities and other institutions to perform      
research and development activities. Funding commitments as of December 31,     
2001 to these institutions for future years are as follows (in thousands):      

                                                                [Download Table]
                                                         
2002.............................................. $  652
2003..............................................    330
2004..............................................    255
2005..............................................    255
2006..............................................    255
                                                   ------
   Total.......................................... $1,747
                                                   ======

The Company has also licensed technology from certain institutions, for   
which it is required to pay a royalty upon future sales, subject to certain     
annual minimums. As of December 31, 2001, such minimum commitments were         
$255,000.                                                                       

 Product Liability and Lack of Insurance--The Company is subject to the risk
of exposure to product liability claims in the event that the use of            
Aldurazyme(TM), Aryplase(TM) or Vibrilase(TM) results in adverse effects during 
testing or commercial sale. BioMarin/Genzyme LLC (the LLC) and the Company      
carry product liability insurance to cover the clinical trials of Aldurazyme    
(by the LLC) and Aryplase and Vibrilase (by the Company). There can be no       
assurance that the Company will be able to obtain product liability insurance   
coverage at economically reasonable rates or that such insurance will provide   
adequate coverage against all possible claims. To date, there have not been any 
such claims.                                                                    

I-21  

DEFM14A
289th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 289th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

9.  RELATED-PARTY TRANSACTIONS:                                                 

On April 13, 1999, the Company entered into a convertible note financing  
agreement in the amount of $26.0 million. Of this amount GBL purchased $4.3     
million worth of such notes and LaMont Asset Management SA (LAM) purchased $9.7 
million. A director of the Company is also the chairman of LAM. The Company     
also entered into an agency agreement with LAM pursuant to which the Company    
agreed to pay LAM a five percent cash commission on sales to certain note       
purchasers. On July 23, 1999, concurrent with the Company's IPO, the Company's  
convertible notes payable (including accrued interest) were converted into      
2,672,020 shares of the Company's common stock at $10 per share. GBL's $4.3     
million convertible note plus interest was converted to 441,911 shares and      
LAM's $9.7 million convertible note plus interest was converted to 996,869      
shares.                                                                         

In April 2001, the Company loaned a Company officer $860,000 to purchase a
property and received a promissory note secured by the property. The note       
matures on October 31, 2004 (subject to various conditions in the employment    
agreement) and bears interest at the Federal mid-term rate (3.9% as of December 
31, 2001).                                                                      

Due to the terms of the collaborative agreement with Genzyme outlined in  
Note 10, Genzyme is considered to be a related party. See also Notes 1 and 10   
for Genzyme related-party transactions.                                         

10.  COLLABORATIVE AGREEMENTS:                                                  

Genzyme--In 1998, the Company entered into an agreement (the Collaboration
Agreement) with Genzyme to establish a joint venture (BioMarin/Genzyme LLC) for 
the worldwide development and commercialization of Aldurazyme to treat MPS I.   
In conjunction with the formation of the joint venture, the Company established 
a wholly-owned subsidiary, BioMarin Genetics, Inc. The Company has a 49 percent 
interest in the joint venture, BioMarin Genetics, Inc. has a 1 percent          
interest, and Genzyme has the remaining 50 percent interest.                    

  Under the Collaboration Agreement, the Company and Genzyme are each required
to make capital contributions to the joint venture in an amount equal to 50     
percent of costs and expenses associated with the development and               
commercialization of Aldurazyme. The parties also agree to share the profits    
equally from such commercialization. In addition, Genzyme purchased 1,333,333   
shares of the Company's common stock at $6 per share in a private placement for 
proceeds of $8.0 million and, concurrent with the IPO, purchased an additional  
769,230 shares of the Company's common stock at the IPO price for an additional 
$10.0 million. Genzyme has also agreed to pay the Company $12.1 million in cash 
upon FDA approval of the biologics license application for Aldurazyme.          

Other Agreements--The Company is engaged in research and development      
collaborations with various academic institutions, commercial research groups,  
and other entities. The agreements provide for sponsorship of research and      
development by the Company and may also provide for exclusive royalty-bearing   
intellectual property licenses or rights of first negotiation regarding         
licenses to intellectual property development under the collaborations.         
Typically, these agreements are terminable for cause by either party upon 90    
days written notice.                                                            

11.  COMPENSATION PLANS:                                                        

Employment Agreements--The Company has entered into employment agreements 
with eight officers. Seven of these agreements can be terminated without cause  
by the Company upon six months prior notice, or by the officer upon three       
months prior written notice to the Company. The employment agreement with the   
Company's Chief Executive Officer (CEO) shall be renewed after three years for  
one additional three-year period unless either party gives nine months notice   
prior to the expiration of the initial three-year period. The annual salaries   
committed under these employment agreements total approximately $2.0 million.   
In addition, three of the agreements provide for the payment of an annual cash  
bonus of up to 100 percent of the base annual salary of the three senior        
officers based upon the Company's market capitalization through June 30, 2000.  
Bonuses for the                                                                 

I-22  

DEFM14A
290th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 290th
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

three senior officers (two of whom are no longer with the Company) totaled      
$294,000 and $0 in 2000 and 2001, respectively. The bonuses for the CEO totaled 
$279,000 in 2001.                                                               

  401(k) Plan--The Company sponsors the BioMarin Retirement Savings Plan. Most
employees (Participants) are eligible to participate following the start of     
their employment, on the earlier of the next occurring January 1, April 1, July 
1 or October 1. Participants may contribute up to 20 percent of their current   
compensation to the 401(k) Plan or an amount up to a statutorily prescribed     
annual limit. The Company pays the direct expenses of the 401(k) Plan and       
matches 50% of the first 2% contributed to the employee accounts. The Company's 
matching contribution vests over four years from employment commencement and    
was $0, $30,000, $90,000 and $123,000 for the years ended December 31, 1999,    
2000, 2001 and for the period from March 21, 1997 (inception) through December  
31, 2001, respectively.                                                         

1998 Employee Stock Purchase Plan (1998 Purchase Plan)--A total of 250,000
shares of Company common stock has been reserved for issuance under the 1998    
Purchase Plan, plus annual increases equal to the lesser of 0.5 percent of the  
outstanding capital stock, 200,000 shares, or a lesser amount set by the Board. 
As of December 31, 2001, 63,083 shares have been issued under the 1998 Purchase 
Plan.                                                                           

12.  SUPPLEMENTAL CASH FLOW INFORMATION:                                        

 The following non-cash transactions took place in the periods presented (in
thousands):                                                                     

                                                        [Enlarge/Download Table]

                                                                                               Period from  
                                                                                              March 21, 1997
                                                                      Year Ended December 31, (Inception) to
                                                                      -----------------------  December 31, 
                                                                       1999     2000   2001        2001     
                                                                       -------  ----  ------  --------------
                                                                                                            
Common stock issued upon conversion of convertible notes plus                                               
  interest........................................................... $25,615   $ --  $   --     $25,615    
Common stock issued in exchange for notes............................      --     --      --      20,500    
Common stock and common stock warrants issued in exchange for                                               
  brokerage services.................................................      --     --      --       1,518    
Common stock surrendered by stockholders' for payment of principle                                          
  and interest.......................................................      --    170      --         170    
Compensation in the form of common stock and common stock                                                   
  options............................................................      --     --      --          18    
Issuance of common stock to acquire the therapeutic assets of IBEX                                          
  at $10.218 per share...............................................      --     --   8,324       8,324    
Fair value of common stock options issued in connection with IBEX                                           
  acquisition........................................................      --     --     291         291    
Fair value of restricted stock grant issued pursuant to an employment                                       
  contract...........................................................      --    313      --         313    
Borrowings under capital lease arrangements..........................      --     --     206         206    

13.  SUBSEQUENT EVENTS:                                                         

In December 2001, the Company signed a definitive agreement with Synapse  
Technologies Inc. (a privately held Canadian company) to acquire all of its     
outstanding capital stock for approximately $10.2 million in Company common     
stock plus future contingent milestone payments totaling $6 million payable in  
cash or common stock at the Company's discretion. The Company will issue        
approximately 885,000 shares of common stock for the purchase.                  

Synapse's operations consist solely of research and development. Its most 
significant project is focused on the development of a proprietary technology   
to treat neurological problems. Since all of its activity is related to         

I-23  

DEFM14A
291st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 291st
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

in-process research and development of technology for which technological       
feasibility had not yet been established and for which no alternative future    
uses exist, the purchase price of $11.2 million, which includes $1.0 million in 
expenses related to transaction costs and the issuance of options and warrants, 
will be expensed. The options and warrants were valued using the Black-Scholes  
Option Pricing Model with the following assumptions: risk-free interest rate of 
5%; expected dividend yield of zero percent; expected lives of 8 years for the  
options and 3.75 years for the warrants; and expected volatility of 61%. The    
transaction failed the "outputs" test outlined in EITF 98-3 (See Note 3) and    
does not qualify as a business combination.                                     

 In February 2002, the Company signed a definitive agreement to purchase all
of the outstanding capital stock of Glyko Biomedical Ltd. (GBL). Upon closing   
(anticipated to be in the second quarter of 2002) GBL shareholders will receive 
11,367,617 shares of Company common stock in exchange for their GBL stock. In   
turn, the Company will retire the existing 11,367,617 shares of restricted      
common stock of the Company currently held by GBL. There will be no net effect  
on the common stock outstanding. It is anticipated that $2.1 million of         
expenses will be incurred and expensed as reorganization costs for this         
transaction in 2002. Approximately $400,000 of transaction costs were incurred  
and expensed in 2001.                                                           

14.  QUARTERLY CONSOLIDATED FINANCIAL DATA (unaudited):                         

The Company's quarterly operating results have fluctuated in the past and 
may continue to do so in the future as a result of a number of factors,         
including, but not limited to, the completion of development projects and       
variations in levels of production.                                             

 The Company's common stock has been traded on the Nasdaq Stock Market since
July 22, 1999. There were 82 common stockholders of record at December 31,      
2001. No dividends have ever been paid by the Company.                          

                                                        [Enlarge/Download Table]

                                                                   Quarter Ended                 
                                                   --------------------------------------------- 
                                                   March 31, June 30,  September 30, December 31,
                                                   --------- --------  ------------- ------------
                                                       (In thousands, except per share data)     
                                                                                                 
2001                                                                                             
Total revenue..................................... $  2,690  $  3,012    $  3,101      $  2,896  
Loss from continuing operations...................   (9,083)  (11,331)    (10,642)      (26,372) 
Loss from discontinued operations.................     (617)     (638)       (373)         (638) 
Loss from disposal of Glyko, Inc..................       --        --          --        (7,912) 
Net loss..........................................   (9,700)  (11,969)    (11,015)      (34,922) 
Net loss per share, basic and diluted.............    (0.26)    (0.30)      (0.26)        (0.77) 
Common stock price per share:                                                                    
   High........................................... $ 12.063  $ 13.210    $ 13.610      $ 14.160  
   Low............................................    7.313     7.500       9.120         9.400  

                                                                   Quarter Ended                 
                                                   --------------------------------------------- 
                                                   March 31, June 30,  September 30, December 31,
                                                   --------- --------  ------------- ------------
                                                       (In thousands, except per share data)     
2000                                                                                             
Total revenue..................................... $  2,791  $  2,258    $  1,950      $  2,715  
Loss from continuing operations...................  (11,202)   (6,854)     (7,731)       (9,828) 
Loss from discontinued operations.................     (534)     (232)       (417)         (566) 
Net loss..........................................  (11,736)   (7,086)     (8,148)      (10,394) 
Net loss per share, basic and diluted.............    (0.34)    (0.20)      (0.23)        (0.28) 
Common stock price per share:                                                                    
   High........................................... $ 38.750  $ 27.750    $ 21.750      $ 17.625  
   Low............................................   12.750    16.750      16.375         7.156  

I-24  

DEFM14A
292nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 292nd
ANNEX J 

GLYKO AUDITED FINANCIAL STATEMENTS IN CANADIAN GAAP 

Index to Glyko Biomedical Ltd. Financial Statements in Canadian GAAP            

                                                                [Download Table]
                                                      
Report of Independent Public Accountants.......... J-2
Balance Sheets.................................... J-3
Statements of Operations.......................... J-4
Statements of Shareholders' Equity................ J-5
Statements of Cash Flows.......................... J-6
Notes to Financial Statements..................... J-7

J-1 

DEFM14A
293rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 293rd
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS* 

To the Shareholders of Glyko Biomedical Ltd.:                                   

We have audited the balance sheets of Glyko Biomedical Ltd. as of December
31, 2000 and 2001, and the related statements of operations, changes in         
shareholders' equity and cash flows for the years ended December 31, 1999,      
2000, and 2001. These financial statements are the responsibility of the        
Company's management. Our responsibility is to express an opinion on these      
financial statements based on our audits.                                       

We conducted our audits in accordance with Canadian generally accepted    
auditing standards. Those standards require that we plan and perform the audit  
to obtain reasonable assurance about whether the financial statements are free  
of material misstatement. An audit includes examining, on a test basis,         
evidence supporting the amount and disclosures in the financial statements. An  
audit also includes assessing the accounting principles used and significant    
estimates made by management, as well as evaluating the overall financial       
statement presentation.                                                         

In our opinion, the financial statements present fairly, in all material  
respects, the financial position of the Company at December 31, 2000 and 2001   
and the results of its operations and its cash flows for the years ended        
December 31, 1999, 2000, and 2001 in accordance with Canadian generally         
accepted accounting principles.                                                 

                            /s/  ARTHUR ANDERSEN LLP

San Francisco, California                                                       
February 21, 2002                                                               

* This report is a copy of a previously issued Arthur Andersen LLP report and   
this report has not been reissued by Arthur Andersen LLP.                   

J-2 

DEFM14A
294th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 294th
GLYKO BIOMEDICAL LTD. 
BALANCE SHEETS  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                                                   March 31,  December 31, December 31,
                                                                     2002         2001         2000    
                                                                  ----------- ------------ ------------
                                                                  (unaudited)                          
                                                                                                       
Assets                                                                                                 
   Cash and cash equivalents..................................... $ 2,418,997 $ 2,444,424  $   408,133 
   Short-term investments........................................          --          --    1,397,217 
   Interest receivable...........................................          --          --       29,876 
   Investment in BioMarin Pharmaceutical Inc.....................  35,944,850  36,740,514   25,129,021 
                                                                  ----------- -----------  ----------- 
          Total assets........................................... $38,363,847 $39,184,938  $26,964,247 
                                                                  =========== ===========  =========== 
Liabilities and shareholders' equity                                                                   
          Total current liabilities.............................. $   730,369 $   461,326  $   315,438 
                                                                  ----------- -----------  ----------- 
Shareholders' equity                                                                                   
   Common shares, unlimited shares authorized                                                          
       34,352,823 shares issued and outstanding at March 31,                                           
         2002 (unaudited), December 31, 2001 and                                                       
         December 31, 2000.......................................  22,552,705  22,552,705   22,552,705 
   Note receivable from shareholder..............................          --          --     (801,837)
   Retained earnings.............................................  15,080,773  16,170,907    4,897,941 
                                                                  ----------- -----------  ----------- 
          Total shareholders' equity.............................  37,633,478  38,723,612   26,648,809 
                                                                  ----------- -----------  ----------- 
          Total liabilities and shareholders' equity............. $38,363,847 $39,184,938  $26,964,247 
                                                                  =========== ===========  =========== 

Approved on behalf of the Board of Directors: 

(signed) Joerg Gruber    (signed) John A. Kolada  

The accompanying notes are an integral part of these statements.  

J-3 

DEFM14A
295th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 295th
GLYKO BIOMEDICAL LTD. 
STATEMENTS OF OPERATIONS  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                               Three month period ended           Year ended December 31,         
                                       March 31,         ---------------------------------------- 
                                  2002         2001          2001          2000          1999     
                               -----------  -----------  ------------  ------------  ------------ 
                               (unaudited)  (unaudited)                                           
                                                                                                  
Expenses:                                                                                         
   General and administrative. $   295,114  $    70,335  $    462,018  $    388,373  $    199,302 
                               -----------  -----------  ------------  ------------  ------------ 
       Total expenses.........     295,114       70,335       462,018       388,373       199,302 
                               -----------  -----------  ------------  ------------  ------------ 
Loss from operations..........    (295,114)     (70,335)     (462,018)     (388,373)     (199,302)

Equity in loss of BioMarin                                                                        
  Pharmaceutical Inc..........  (3,268,243)  (3,091,819)  (18,903,783)  (11,934,186)  (10,172,934)
Gain on reduction of share                                                                        
  ownership of BioMarin                                                                           
  Pharmaceutical..............   2,472,537      377,252    30,515,276     1,424,344    26,814,190 
Interest income...............         686       36,407       123,491       120,518       186,953 
                               -----------  -----------  ------------  ------------  ------------ 
Net income (loss)............. $(1,090,134) $(2,748,495) $ 11,272,966  $(10,777,697) $ 16,628,907 
                               ===========  ===========  ============  ============  ============ 

Earnings per share--basic..... $     (0.03) $     (0.08) $       0.33  $      (0.32) $       0.54 
                               ===========  ===========  ============  ============  ============ 
Earnings per share--diluted... $     (0.03) $     (0.08) $       0.33  $      (0.32) $       0.50 
                               ===========  ===========  ============  ============  ============ 
Weighted average number of                                                                        
  shares--basic...............  34,352,823   34,352,823    34,352,823    33,915,043    31,065,575 
                               ===========  ===========  ============  ============  ============ 
Weighted average number of                                                                        
  shares--diluted.............  34,352,823   34,352,823    34,372,420    33,915,043    33,567,702 
                               ===========  ===========  ============  ============  ============ 

The accompanying notes are an integral part of these statements.  

J-4 

DEFM14A
296th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 296th
GLYKO BIOMEDICAL LTD. 
STATEMENTS OF STOCKHOLDERS' EQUITY  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                                                   Note       Retained                 
                                  Common Shares        Common   Receivable    Earnings                 
                              ----------------------   Share       From     (Accumulated               
                                Shares     Amount     Warrants  Shareholder   Deficit)        Total    
                              ---------- ----------- ---------  ----------- ------------  ------------ 
                                                                                                       
Balance at December 31, 1998. 28,020,234 $17,963,167 $ 547,285   $(712,261) $   (953,269) $ 16,844,922 
Net income for the year ended                                                                          
  December 31, 1999..........         --          --        --          --    16,628,907    16,628,907 
Interest on note from                                                                                  
  shareholder................         --          --        --     (34,376)           --       (34,376)
Exercise of common share                                                                               
  options....................    280,560     161,633        --          --            --       161,633 
Exercise of common share                                                                               
  warrants...................  3,534,528   2,647,669  (400,813)         --            --     2,246,856 
                              ---------- ----------- ---------   ---------  ------------  ------------ 
Balance at December 31, 1999. 31,835,322 $20,772,469 $ 146,472   $(746,637) $ 15,675,638  $ 35,847,942 
Net loss for the year ended                                                                            
  December 31, 2000..........         --          --        --          --   (10,777,697)  (10,777,697)
Exercise of common share                                                                               
  options....................    299,500     286,701        --          --            --       286,701 
Exercise of common share                                                                               
  warrants...................  2,218,001   1,493,535  (146,472)         --            --     1,347,063 
Interest accrued on note                                                                               
  receivable from shareholder         --          --        --     (55,200)           --       (55,200)
                              ---------- ----------- ---------   ---------  ------------  ------------ 
Balance at December 31, 2000. 34,352,823 $22,552,705 $      --   $(801,837) $  4,897,941  $ 26,648,809 
Net income for the year ended                                                                          
  December 31, 2001..........         --          --        --          --    11,272,966    11,272,966 
Interest accrued on note                                                                               
  receivable from shareholder         --          --        --     (78,073)           --       (78,073)
Repayment of note receivable                                                                           
  from shareholder...........         --          --        --     879,910            --       879,910 
                              ---------- ----------- ---------   ---------  ------------  ------------ 
Balance at December 31, 2001. 34,352,823 $22,552,705 $      --   $      --  $ 16,170,907  $ 38,723,612 
Net loss for the three month                                                                           
  period ended March 31,                                                                               
  2002 (unaudited)...........         --          --        --          --    (1,090,134)   (1,090,134)
                              ---------- ----------- ---------   ---------  ------------  ------------ 
Balance at March 31, 2002                                                                              
  (unaudited)................ 34,352,823 $22,552,705 $      --   $      --  $ 15,080,773  $ 37,633,478 
                              ========== =========== =========   =========  ============  ============ 

The accompanying notes are an integral part of these statements.  

J-5 

DEFM14A
297th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 297th
GLYKO BIOMEDICAL LTD. 
STATEMENTS OF CASH FLOWS  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                                        Three Month Period ended                                           
                                                                March 31,                  Year ended December 31,         
                                                        ------------------------  ---------------------------------------- 
                                                            2002         2001         2001          2000          1999     
                                                        -----------  -----------  ------------  ------------  ------------ 
                                                               (unaudited)                                                 
                                                                                                                           
Cash flows from operating activities:                                                                                      
   Net income (loss)................................... $(1,090,134) ($2,748,495) $ 11,272,966  $(10,777,697) $ 16,628,907 
Adjustments to reconcile net income (loss) to                                                                              
  net cash used in operating activities:                                                                                   
   Equity in loss of BioMarin                                                                                              
     Pharmaceutical Inc................................   3,268,243    3,091,819    18,903,783    11,934,186    10,172,934 
   Gain on reduction of ownership of BioMarin..........  (2,472,537)    (377,252)  (30,515,276)   (1,424,344)  (26,814,190)
   Interest on note receivable from                                                                                        
     shareholder.......................................          --                    (78,073)      (55,200)      (27,600)
   Changes in assets and liabilities:                                                                                      
       Interest receivable.............................          --       14,941        29,876       (29,876)           -- 
       Accrued liabilities.............................     269,001      (68,932)      145,888       (50,131)       15,460 
                                                        -----------  -----------  ------------  ------------  ------------ 
   Total adjustments...................................   1,064,707    2,660,576   (11,513,802)   10,374,635   (16,653,396)
                                                        -----------  -----------  ------------  ------------  ------------ 
          Net cash used in operating                                                                                       
            activities.................................     (25,427)     (87,919)     (240,836)     (403,062)      (24,489)
                                                        -----------  -----------  ------------  ------------  ------------ 
Cash flows from investing activities:                                                                                      
   Investment in BioMarin Pharmaceutical Inc...........          --                         --            --    (4,419,110)
   Sale (purchase) of short-term investments...........          --    1,397,217     1,397,217    (1,397,217)           -- 
                                                        -----------  -----------  ------------  ------------  ------------ 
          Net cash used in investing activities........                1,397,217     1,397,217    (1,397,217)   (4,419,110)
                                                        -----------  -----------  ------------  ------------  ------------ 
Cash flows from financing activities:                                                                                      
   Repayment of note receivable from shareholder.......          --      (16,246)      879,910            --       100,000 
   Proceeds from the exercise of common share                                                                              
     options and common share warrants.................          --           --            --     1,633,764     2,350,423 
                                                        -----------  -----------  ------------  ------------  ------------ 
          Net cash provided by                                                                                             
            financing activities.......................          --      (16,246)      879,910     1,633,764     2,450,423 
                                                        -----------  -----------  ------------  ------------  ------------ 
Net increase (decrease) in cash and cash                                                                                   
  equivalents..........................................     (25,427)   1,293,052     2,036,291      (166,515)   (1,993,176)
Cash and cash equivalents, beginning of year...........   2,444,424      408,133       408,133       574,648     2,567,824 
                                                        -----------  -----------  ------------  ------------  ------------ 
Cash and cash equivalents, end of year................. $ 2,418,997   $1,701,185  $  2,444,424  $    408,133  $    574,648 
                                                        ===========  ===========  ============  ============  ============ 

The accompanying notes are an integral part of these statements.  

J-6 

DEFM14A
298th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 298th
GLYKO BIOMEDICAL LTD. 

NOTES TO FINANCIAL STATEMENTS 

1.  The Company and Description of the Business                                 

 Glyko Biomedical Ltd. (the Company or GBL) is a Canadian company, which was
established in 1992 to acquire all of the outstanding capital stock of Glyko,   
Inc., a Delaware corporation. Since its inception in October 1990, Glyko, Inc.  
engaged in research and development of new techniques to analyze and manipulate 
carbohydrates for research, diagnostic and pharmaceutical purposes. Glyko, Inc. 
developed a line of analytic instrumentation laboratory products that include   
an imaging system, analysis software and chemical analysis kits.                

In October 1996, GBL formed BioMarin Pharmaceutical Inc. (BioMarin), a    
Delaware corporation in the development stage, to develop the Company's         
pharmaceutical products. BioMarin began business on March 21, 1997 (inception)  
and subsequently issued 1.5 million shares of common stock to GBL for $1.5      
million. As consideration for a certain license agreement dated June 1997,      
BioMarin issued GBL 7 million shares of BioMarin common stock. Beginning in     
October 1997, BioMarin raised capital from third parties. As of December 31,    
1997, the Company began recording its share of BioMarin's net loss utilizing    
the equity method of accounting. On June 30, 1998, GBL made an additional $1    
million investment in BioMarin.                                                 

On October 7, 1998, GBL sold to BioMarin 100% of the outstanding capital  
stock of Glyko, Inc. in exchange for 2,259,039 shares of BioMarin's common      
stock. In addition, BioMarin agreed to assume options, previously issued to     
employees of Glyko, Inc., to purchase up to 585,969 shares of GBL's common      
stock (exercisable into 255,540 shares of BioMarin common stock) and BioMarin   
paid $500 in cash.                                                              

On April 13, 1999, the Company entered into a convertible note arrangement
with BioMarin in the amount of $4.3 million, as part of a $26 million           
convertible note financing. This note plus accrued interest was converted into  
441,911 shares of BioMarin common stock concurrent with BioMarin's initial      
public offering on July 23, 1999.                                               

In May 2001, BioMarin completed two private placements of its securities, 
raising total net proceeds of approximately $42.5 million. On May 16, 2001,     
BioMarin sold 4,763,712 shares of common stock at $9.45 per share and, for no   
additional consideration, issued three-year warrants to purchase 714,554 shares 
of common stock at an exercise price of $13.10 per share. On May 17, 2001 a     
fund managed by Acqua Wellington purchased 105,821 shares of common stock and   
received warrants to purchase 15,873 shares of common stock on the same price   
and terms as the May 16, 2001 transaction.                                      

In August 2001, BioMarin singed an amended agreement with Acqua Wellington
North American Equities Fund Ltd. (Acqua Wellington) for an equity investment   
in BioMarin. The agreement allows for the purchase of up to $27.7 million.      
Under the terms of the agreement, BioMarin will have the option to request that 
Acqua Wellington invest in BioMarin through sales of registered common stock at 
a small discount to market price. The maximum amount that BioMarin may request  
to be bought in any one month is dependent upon the market price of the stock   
(or an amount that can be mutually agreed-upon by both parties) and is referred 
to as the "Draw Down Amount." Subject to certain conditions, Acqua Wellington   
is obligated to purchase this amount if requested to do so by BioMarin. In      
addition, BioMarin may, at its discretion, grant a "Call Option" to Acqua       
Wellington for an additional investment in an amount up to the "Draw Down       
Amount" which Acqua Wellington may or may not choose to exercise. During 2001,  
Acqua Wellington purchased 1,344,194 shares for $13.5 million ($13.2 million    
net of issuance costs). Under this agreement, Acqua Wellington may also         
purchase stock and receive similar terms to any other equity financing raised   
by BioMarin.                                                                    

On October 31, 2001, BioMarin purchased from IBEX Technologies Inc. (TSE: 
IBT) and its subsidiaries development activities associated with the IBEX       
therapeutic enzyme drug products (including Neutralase/TM /and Phenylase). The  
purchase agreement called for a total purchase price of $10.4 million,          
consisting of $2 million in                                                     

J-7 

DEFM14A
299th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 299th
GLYKO BIOMEDICAL LTD. 

NOTES TO FINANCIAL STATEMENTS--(Continued)  

cash and $8.4 million in BioMarin common stock. In accordance with the purchase 
agreement, the number of common shares was based on the average share price     
from September 5, 2001 to October 8, 2001, which resulted in the issuance of    
814,467 shares. The purchase also includes up to approximately $9.5 million in  
contingency payments upon regulatory approval of Neutralase and Phenylase,      
provided that approval occurs within five years. All of the purchase price plus 
related expenses totaling $11.7 million was attributed to in-process research   
and development and was expensed on BioMarin's consolidated statements of       
operations.                                                                     

On December 13, 2001, BioMarin completed a public offering of its common  
stock. In the offering, BioMarin sold 8,050,000 shares, including 1,050,000     
shares to cover over-allotments, at a price to the public of $12.00 per share,  
or a total offering price of $96.6 million. The net proceeds to BioMarin were   
approximately $90.4 million.                                                    

In December 2001, BioMarin decided to close the carbohydrate analytical   
business portion of Glyko, Inc., which provided all of Glyko, Inc.'s revenues.  
Accordingly, BioMarin recorded a Glyko, Inc. closure expense of $7.9 million in 
the 2001 consolidated statements of operations. This charge consisted primarily 
of an impairment reserve against the unamortized balance of goodwill and other  
intangible assets related to the acquisition of Glyko, Inc. The majority of the 
Glyko, Inc. employees will be incorporated into the BioMarin business and such  
employees will continue to provide necessary analytic and diagnostic support to 
BioMarin's therapeutic products.                                                

As a result of BioMarin's IPO, concurrent with the conversion of the notes
from GBL and other noteholders, the sale by BioMarin of common stock to Acqua   
Wellington, the sales by BioMarin of common stock in the private placements and 
a follow-on offering, the exercise of BioMarin stock options and warrants by    
third parties, and the purchase of IBEX Technologies intellectual property and  
other assets associated with the IBEX therapeutic enzyme drug products, GBL's   
ownership of BioMarin's outstanding stock on March 31, 2002 (unaudited) and     
December 31, 2001 was 21.3 percent and 21.7 percent, respectively.              

GBL has limited operating activities and its principal asset is its       
investment in BioMarin. Accordingly, without further investment in other        
companies or technologies, management believes that GBL has sufficient cash to  
sustain planned operations for the foreseeable future.                          

2.  Summary of Significant Accounting Policies                                  

The accompanying financial statements and related footnotes have been     
prepared by the Company in accordance with accounting principles generally      
accepted in Canada, using U.S. dollars. The results of operations of BioMarin   
have been reported in the Company's financial statements for the years ended    
December 31, 2001, 2000, 1999 and the three month periods ended March 31, 2002  
and 2001, based on the equity method of accounting. Subsequent to October 7,    
1998, the results of operations of Glyko, Inc. have been consolidated into the  
results of operations of BioMarin.                                              

Use of Estimates:                                                           

The preparation of the Company's financial statements in conformity with  
accounting principles generally accepted in Canada requires management to make  
certain estimates and assumptions that effect the reported amounts of assets    
and liabilities, disclosure of contingent assets and liabilities at the dates   
of the financial statements, and the reported amounts of revenues and expenses  
during the reporting period. Actual results could differ from those estimates.  
Significant estimates made by management affecting the BioMarin consolidated    
financial statements include determination of progress to date of research and  
development projects in-process, the amortization period of goodwill and other  
intangibles, and asset impairment reserves related to certain leasehold         
improvements and equipment.                                                     

J-8 

DEFM14A
300th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 300th
GLYKO BIOMEDICAL LTD. 

NOTES TO FINANCIAL STATEMENTS--(Continued)  

Cash and Cash Equivalents:                                                  

 Cash and cash equivalents consist of amounts held with banks and short-term
investments with original maturities of less than three months when purchased.  

Foreign Exchange:                                                           

  As most of GBL's major transactions are in U.S. dollars, GBL has adopted the
U.S. dollar as its currency of measurement and reporting. Any assets and        
liabilities denominated in foreign currency have been translated into U.S.      
dollars at the current rate of exchange existing at year-end and revenues and   
expenses are translated at the average monthly exchange rates. Transaction      
gains and losses included in the statements of operations are not material.     

Income Taxes:                                                               

Income taxes are provided using the asset and liability method. GBL has   
accumulated losses for income tax purposes, which are available to reduce       
Canadian taxable income in future years and for which no future tax benefit has 
been recognized in the accounts. Because Glyko recognizes gains on the          
reduction of its share ownership of BioMarin when BioMarin sells stock to third 
parties, Glyko has reported significant cumulative net income. However, because 
BioMarin is expected to consume the majority of its stock sales proceeds in its 
research and development activities in coming years, Glyko does not expect that 
tax liabilities will ever crystallize related to these gains. Accordingly, no   
deferred taxes have been provided.                                              

 At December 31, 2001, GBL has net operating loss carryforwards for Canadian
income tax purposes of approximately $1.7 million, which began to expire in     
2000.                                                                           

Earnings per Share:                                                         

Potentially dilutive securities outstanding at March 31, 2002 (unaudited) 
and December 31, 2001, 2000 and 1999, respectively, include options to purchase 
81,397, 45,000, 7,750 and 291,000 common shares, respectively, and warrants for 
the purchase of 2.2 million common shares in 1999. For the year ended December  
31, 2000, these securities were not considered in the computation of diluted    
loss per share because their effect would be anti-dilutive.                     

3.  Investment in BioMarin Pharmaceutical Inc.                                  

 The Company accounts for its investment in BioMarin using the equity method
of accounting. As of March 31, 2002, (unaudited) and December 31, 2001, the     
Company owned 21.3 and 21.7 percent, respectively, of BioMarin. During the      
first nine months of 1997, the Company owned 100 percent of BioMarin and due to 
subsequent outside financings by BioMarin in the fourth quarter of 1997, the    
Company's ownership percentage decreased to 41.3 percent. BioMarin's            
convertible note financing, in which GBL invested $4.3 million, plus BioMarin's 
IPO, BioMarin's concurrent investment from Genzyme in 1999, the sales by        
BioMarin of common stock to Acqua Wellington, the sale of stock in private      
placements, the sale of stock in a follow-on offering, BioMarin's sale of       
common stock pursuant to the exercise of common stock options and common stock  
warrants by third parties, and the purchase of IBEX Technologies intellectual   
property and other assets associated with the IBEX therapeutic enzyme drug      
products has reduced GBL's ownership to 21.7 percent of BioMarin's outstanding  
common stock as of December 31, 2001.                                           

As a result of BioMarin's issuance of shares to third parties, the Company
recorded a gain on dilution of ownership of BioMarin of $30,515,276, $1,424,344 
and $26,814,190 during 2001, 2000 and 1999, respectively. Future fundraising    
efforts of BioMarin could result in a further reduction of Glyko Biomedical     
Ltd.'s ownership percentage.                                                    

J-9 

DEFM14A
301st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 301st
GLYKO BIOMEDICAL LTD. 

NOTES TO FINANCIAL STATEMENTS--(Continued)  

While BioMarin has an accumulated deficit of $174.7 million at March 31,  
2002 and is expected to incur significant losses through 2003, management of    
GBL believes that there has not been any impairment of its investment in        
BioMarin.                                                                       

4.  Note Receivable                                                             

 In November 1998, per the terms of the BioMarin acquisition of Glyko, Inc.,
GBL loaned $712,261 to an officer of the Company to exercise expiring stock     
options. The note matured in May 2001 and the note plus accrued interest was    
repaid in the third quarter of 2001.                                            

5.  Common Share Option Plan                                                    

  The Company has a common share option plan (the Plan) under which options to
purchase common stock may be granted by the Board of Directors to directors,    
officers, consultants and key employees at not less than fair market value,     
less any permissible discounts, on the date of grant. Options are exercisable   
over a number of years specified at the time of the grant, which cannot exceed  
ten years. The maximum aggregate number of shares that may be granted and sold  
under the Plan is 3 million shares.                                             

The Company accounts for the Plan such that no compensation cost has been 
recognized, except for options granted to consultants, because, under the       
Option Plan, the option exercise price equals the market value of stock on the  
date of grant. In general, the Plan options vest over 48 months and all options 
expire after 5 years or 90 days after employee termination.                     

  A summary of the status of the Company's Plan at December 31, 2001, 2000 and
1999 and changes during the years then ended is presented in the table and      
narrative below:                                                                

                                                        [Enlarge/Download Table]

                                      2001                  2000                   1999         
                              -------------------- ---------------------- ----------------------
                                      Wtd. Avg. ex           Wtd. Avg. ex           Wtd. Avg. ex
                              Shares   price (1)    Shares      price      Shares    price (2)  
                              ------  ------------ --------  ------------ --------  ------------
                                                                                                
Outstanding beginning of year  7,750   Cdn. $5.85   291,000   Cdn. $1.24   548,290   Cdn. $0.77 
Granted...................... 45,000   Cdn. $4.50    30,000   Cdn. $5.70    24,000   Cdn. $6.00 
Exercised....................    Nil               (299,500)  Cdn. $1.37  (280,560)  Cdn. $0.88 
Canceled..................... (7,750)  Cdn. $5.85   (13,750)  Cdn. $5.70      (730)  Cdn. $0.88 
                              ------               --------               --------              
Outstanding at end of year... 45,000   Cdn. $4.50     7,750   Cdn. $5.85   291,000   Cdn. $1.24 
                              ======               ========               ========              
Exercisable at end of year... 45,000                  7,750                291,000              
                              ======               ========               ========              

-----------------                                                               
(1) The US$ equivalent of Canadian $1.00 at December 31, 2001 was approximately 
$0.628496.                                                              
(2) The US$ equivalent of Canadian $1.00 at December 31, 1999 was approximately 
$0.689026. The weighted average exercise price is quoted in Cdn.$ as the
Company's Common Shares are traded on the Toronto Stock Exchange.       

  There are 857,324 options available for grant under the plan at December 31,
2001. The average remaining contractual life of the options outstanding at      
December 31, 2001 is 3 years.                                                   

J-10  

DEFM14A
302nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 302nd
GLYKO BIOMEDICAL LTD. 

NOTES TO FINANCIAL STATEMENTS--(Continued)  

6. Common Share Warrants                                                        

Below is a summary of Common Share warrants outstanding as of December 31,
2001, 2000 and 1999:                                                            

                                                                [Download Table]

                                 Number of  Exercise                        
                                  Shares     Price           Expiry         
       Date of Issuance         ----------  -------- -----------------------
                                                                            
Balance as of December 31, 1998  5,752,529                                  
Exercised 1995 Warrants........   (653,528) Cdn$0.90                        
Exercised 1997 Warrants........ (2,881,000) Cdn$1.00                        
                                ----------                                  
Subtotal December 31, 1999.....  2,218,001  Cdn$0.90 April 3 to May 30, 2000
Exercised 1995 Warrants........ (2,218,001) Cdn$0.90                        
                                ----------                                  
Balance as of December 31, 2000         --                                  
                                ==========                                  

7.  Related Party Transactions                                                  

 For the years ended December 31, 2001, 2000 and 1999, we paid legal fees to
Blake, Cassels and Graydon LLP in which two of the directors, Mr. Kolada and    
Mr. Trossman are partners. During the years ended December 31, 2001, 2000 and   
1999, Glyko incurred expenses of $248,483, $142,208 and zero, respectively,     
payable to Blake, Cassels and Graydon LLP, relating to general corporate        
services and, in 2001, services related to the acquisition of Glyko by BioMarin.

Since October 8, 1998, the Company has paid BioMarin a monthly management 
and reporting fee for its services primarily relating to management,            
accounting, finance and government reporting. BioMarin had accrued receivables  
relating to these services of zero, $9,000 and $37,500 at December 31, 2001,    
2000 and 1999, respectively.                                                    

8.  Subsequent Events                                                           

In December 2001, BioMarin signed a definitive agreement with Synapse     
Technologies Inc. (a privately held Canadian company) to acquire all of its     
outstanding capital stock for approximately $10.2 million in BioMarin stock     
plus future milestone payments totaling $6 million payable in cash or common    
stock, at BioMarin's discretion. BioMarin will issue approximately 885,000      
shares of common stock for the purchase. The acquisition will be recorded by    
BioMarin upon closing in the first quarter of 2002. All of the purchase price   
along with related expenses will be expensed as in-process research and         
development costs in BioMarin's consolidated statements of operations for the   
first quarter of 2002.                                                          

  On February 7, 2002, the Company signed a definitive agreement with BioMarin
whereby BioMarin would purchase all of the Company's outstanding capital stock  
in exchange for approximately 11.4 million shares of freely tradable BioMarin's 
common stock. There will be no net effect to BioMarin's outstanding common      
stock, as BioMarin plans to retire the existing shares of its restricted common 
stock currently held by the Company upon closing in exchange for shares of      
BioMarin preferred stock to be issued to Glyko. If the proposed purchase by     
BioMarin is approved by stockholders of BioMarin and the Company's shareholders 
and relevant regulatory authorities, the Company will become a wholly-owned     
indirect subsidiary of BioMarin and will concurrently continue under the laws   
of British Columbia as a private company with no operations.                    

J-11  

DEFM14A
303rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 303rd
ANNEX K 

GLYKO AUDITED FINANCIAL STATEMENTS IN US GAAP 

Index to Glyko Biomedical Ltd. Financial Statements in US GAAP                  

                                                                [Download Table]
                                                                          
Report of Independent Public Accountants.............................. K-2
Balance Sheets........................................................ K-3
Statements of Operations.............................................. K-4
Statements of Shareholders' Equity.................................... K-5
Statements of Cash Flows.............................................. K-6
Notes to Financial Statements......................................... K-7

K-1 

DEFM14A
304th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 304th
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS* 

To the Shareholders of Glyko Biomedical Ltd.:                                   

 We have audited the accompanying balance sheets of Glyko Biomedical Ltd. (a
Canadian company) as of December 31, 2001 and 2000 and the related statements   
of operations, shareholders' equity and cash flows for the years ended December 
31, 2001, 2000 and 1999. These financial statements are the responsibility of   
the company's management. Our responsibility is to express an opinion on these  
financial statements based on our audits.                                       

We conducted our audits in accordance with auditing standards generally   
accepted in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test       
basis, evidence supporting the amounts and disclosures in the financial         
statements. An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Glyko Biomedical Ltd. as of 
December 31, 2001 and 2000, and the results of its operations and its cash      
flows for the years ended December 31, 2001, 2000 and 1999 in conformity with   
accounting principles generally accepted in the United States.                  

                            /s/  ARTHUR ANDERSEN LLP

San Francisco, California                                                       
February 21, 2002                                                               

* This report is a copy of a previously issued Arthur Andersen LLP report and   
this report has not been reissued by Arthur Andersen LLP.                   

K-2 

DEFM14A
305th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 305th
GLYKO BIOMEDICAL LTD. 
BALANCE SHEETS  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                                                March 31,   December 31,  December 31, 
                                                                  2002          2001          2000     
                                                              ------------  ------------  ------------ 
                                                               (unaudited)                             
                                                                                                       
Assets                                                                                                 
Current assets:                                                                                        
   Cash and cash equivalents................................. $  2,418,997  $  2,444,424  $    408,133 
   Short-term investments....................................           --            --     1,397,217 
   Interest receivable.......................................           --            --        29,876 
                                                              ------------  ------------  ------------ 
       Total current assets..................................    2,418,997     2,444,424     1,835,226 
Investment in BioMarin Pharmaceutical Inc....................   31,574,699    34,857,531    19,020,505 
                                                              ------------  ------------  ------------ 
       Total assets.......................................... $ 33,993,696  $ 37,301,955  $ 20,855,731 
                                                              ============  ============  ============ 

Liabilities and Shareholders' equity                                                                   
Current liabilities:                                                                                   
   Accrued liabilities....................................... $    730,369  $    461,327  $    315,438 
                                                              ------------  ------------  ------------ 
       Total current liabilities.............................      730,369       461,327       315,438 
                                                              ------------  ------------  ------------ 

Shareholders' equity:                                                                                  
   Common shares, no par value, unlimited shares authorized,                                           
     34,352,823 shares issued and outstanding at March 31,                                             
     2002 (unaudited), December 31, 2001 and December 31,                                              
     2000....................................................   22,535,096    22,535,096    22,535,096 
   Additional paid-in capital................................   72,627,479    70,154,983    39,561,634 
   Note receivable from shareholder..........................           --            --      (801,837)
   Accumulated deficit.......................................  (61,899,248)  (55,849,451)  (40,754,600)
                                                              ------------  ------------  ------------ 
       Total shareholders' equity............................   33,263,327    36,840,628    20,540,293 
                                                              ------------  ------------  ------------ 
       Total liabilities and shareholders' equity............ $ 33,993,696  $ 37,301,955  $ 20,855,731 
                                                              ============  ============  ============ 

The accompanying notes are integral part of these statements. 

K-3 

DEFM14A
306th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 306th
GLYKO BIOMEDICAL LTD. 
STATEMENTS OF OPERATIONS  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                    For the Three Month Period                                          
                                         Ended March 31,            For the Year Ended December 31,     
                                    ------------------------   ---------------------------------------- 
                                        2002          2001         2001          2000          1999     
                                    -----------   -----------  ------------  ------------  ------------ 
                                           (unaudited)                                                  
                                                                                                        
Expenses:                                                                                               
   General and administrative...... $   295,114   $    70,335  $    462,022  $    388,373  $    199,302 
                                    -----------   -----------  ------------  ------------  ------------ 
       Total expenses..............     295,114        70,335       462,022       388,373       199,302 
                                    -----------   -----------  ------------  ------------  ------------ 
Loss from operations...............    (295,114)      (70,335)     (462,022)     (388,373)     (199,302)
Equity in loss of BioMarin                                                                              
  Pharmaceutical Inc...............  (5,755,369)   (2,815,053)  (14,678,250)  (11,312,285)   (9,999,581)
Interest income....................         686        20,162        45,421        65,317       159,352 
                                    -----------   -----------  ------------  ------------  ------------ 
Net loss........................... $(6,049,797)  $(2,865,226) $(15,094,851) $(11,635,341) $(10,039,531)
                                    ===========   ===========  ============  ============  ============ 
Net loss per common share, basic                                                                        
  and diluted...................... $     (0.18)  $     (0.08) $      (0.44) $      (0.34) $      (0.32)
                                    ===========   ===========  ============  ============  ============ 
Weighted average common shares                                                                          
  outstanding......................  34,352,823    34,352,832    34,352,823    33,915,043    31,065,575 
                                    ===========   ===========  ============  ============  ============ 

The accompanying notes are an integral part of these statements.  

K-4 

DEFM14A
307th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 307th
GLYKO BIOMEDICAL LTD. 
STATEMENTS OF SHAREHOLDERS' EQUITY  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                                                           Note                                
                               Common Share      Additional    Common   Receivable                             
                          ----------------------  Paid In      Share       From      Accumulated               
                            Shares     Amount     Capital     Warrants  Shareholder    Deficit        Total    
                          ---------- ----------- ----------- ---------  ----------- ------------  ------------ 
                                                                                                               
Balance at December 31,                                                                                        
 1999.................... 31,835,322 $20,772,469 $38,064,481 $ 149,406   $(749,571) $(29,119,259) $ 29,117,526 
Net loss for the year....         --          --          --        --          --   (11,635,341)  (11,635,341)
Exercise of common share                                                                                       
 options.................    299,500     269,092          --        --          --            --       269,092 
Exercise of common share                                                                                       
 warrants................  2,218,001   1,493,535      17,609  (149,406)         --            --     1,361,738 
Interest accrued on note                                                                                       
 receivable from                                                                                               
 shareholder.............         --          --      55,200        --     (52,266)           --         2,934 
Additional paid-in                                                                                             
 capital from the sale                                                                                         
 of common stock by                                                                                            
 BioMarin                                                                                                      
 Pharmaceutical Inc......         --          --   1,424,344        --          --            --     1,424,344 
                          ---------- ----------- ----------- ---------   ---------  ------------  ------------ 

Balance at December 31,                                                                                        
 2000.................... 34,352,823 $22,535,096 $39,561,634 $      --   $(801,837) $(40,754,600) $ 20,540,293 
                          ========== =========== =========== =========   =========  ============  ============ 
Net loss for the year....         --          --          --                         (15,094,851)  (15,094,851)
Interest accrued on note                                                                                       
 receivable from                                                                                               
 shareholder and other...         --          --      78,073        --     (78,073)           --            -- 
Repayment of note                                                                                              
 receivable from                                                                                               
 shareholder.............         --          --          --        --     879,910            --       879,910 
Additional paid-in                                                                                             
 capital from the sale                                                                                         
 of common stock by                                                                                            
 BioMarin                                                                                                      
 Pharmaceutical Inc......         --          --  30,515,276        --          --            --    30,515,276 
                          ---------- ----------- ----------- ---------   ---------  ------------  ------------ 

Balance at December 31,                                                                                        
 2001.................... 34,352,823 $22,535,096 $70,154,983 $      --   $      --  $(55,849,451) $ 36,840,628 
                          ========== =========== =========== =========   =========  ============  ============ 
Net loss for the three                                                                                         
 month period (unaudited)         --          --          --        --          --    (6,049,797)   (6,049,797)
Additional paid-in                                                                                             
 capital from the sale of                                                                                      
 common stock by                                                                                               
 BioMarin Pharmaceutical                                                                                       
 Inc. (unaudited)........         --          --   2,472,496        --          --            --     2,472,496 
                          ---------- ----------- ----------- ---------   ---------  ------------  ------------ 

Balance at March 31,                                                                                           
 2002 (unaudited)........ 34,352,823 $22,535,096 $72,627,479 $      --   $      --  $(61,899,248) $ 33,263,327 
                          ========== =========== =========== =========   =========  ============  ============ 

The accompanying notes are an integral part of these statements.  

K-5 

DEFM14A
308th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 308th
GLYKO BIOMEDICAL LTD. 
STATEMENTS OF CASH FLOWS  
(in U.S. dollars) 

                                                        [Enlarge/Download Table]

                                    Three Month Period                                              
                                      Ended March 31,               Year Ended December 31,         
                                 ------------------------  ---------------------------------------- 
                                     2002         2001         2001          2000          1999     
                                 -----------  -----------  ------------  ------------  ------------ 
                                        (unaudited)                                                 
                                                                                                    
Cash flows from operating                                                                           
 activities:                                                                                        
   Net loss..................... $(6,049,797) $(2,865,226) $(15,094,851) $(11,635,341) $(10,039,531)
   Adjustments to reconcile                                                                         
    net loss to net cash used                                                                       
    in operating activities:                                                                        
   Equity in loss of BioMarin                                                                       
    Pharmaceutical Inc..........   5,755,369    2,815,053    14,678,250    11,312,285     9,999,581 
   Changes in assets and                                                                            
    liabilities:                                                                                    
     Interest receivable........          --       14,941        29,876       (29,876)           -- 
     Accrued liabilities........     269,001      (68,933)      145,889       (50,131)       15,461 
                                 -----------  -----------  ------------  ------------  ------------ 
   Total adjustments............   6,024,370    2,761,061    14,854,015    11,232,278    10,015,042 
                                 -----------  -----------  ------------  ------------  ------------ 
     Net cash used in                                                                               
       operating activities.....     (25,427)    (104,165)     (240,836)     (403,063)      (24,489)
                                 -----------  -----------  ------------  ------------  ------------ 
Cash flows from investing                                                                           
 activities:                                                                                        
   Investment in BioMarin                                                                           
    Pharmaceutical Inc..........          --           --            --            --    (4,419,110)
   Sale (Purchase) of                                                                               
    short-term investments......          --    1,397,217     1,397,217    (1,397,217)           -- 
                                 -----------  -----------  ------------  ------------  ------------ 
     Net cash provided by                                                                           
       (used in) investing                                                                          
       activities...............          --    1,397,217     1,397,217    (1,397,217)   (4,419,110)
                                 -----------  -----------  ------------  ------------  ------------ 
Cash flows from financing                                                                           
 activities:                                                                                        
Proceeds from exercise of                                                                           
 common share options and                                                                           
 warrants.......................          --           --            --     1,633,765     2,350,423 
   Repayment of note                                                                                
    receivable from                                                                                 
    shareholder.................          --           --       879,910            --       100,000 
                                 -----------  -----------  ------------  ------------  ------------ 
     Net cash provided by                                                                           
       financing activities.....          --           --       879,910     1,633,765     2,450,423 
                                 -----------  -----------  ------------  ------------  ------------ 
Net increase (decrease) in                                                                          
 cash and cash equivalents......     (25,427)   1,293,052     2,036,291      (166,515)   (1,993,176)
Cash and cash equivalents,                                                                          
 beginning of period............   2,444,424      408,133       408,133       574,648     2,567,824 
                                 -----------  -----------  ------------  ------------  ------------ 
Cash and cash equivalents,                                                                          
 end of period.................. $ 2,418,997  $ 1,701,185  $  2,444,424  $    408,133  $    574,648 
                                 ===========  ===========  ============  ============  ============ 

The accompanying notes are an integral part of these statements.  

K-6 

DEFM14A
309th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 309th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  

1. The Company and Description of the Business                                  

 Glyko Biomedical Ltd. (the Company or GBL) is a Canadian company, which was
established in 1992 to acquire all of the outstanding capital stock of    
Glyko, Inc., a Delaware corporation. Since its inception in October 1990, 
  Glyko, Inc. engaged in research and development of new techniques to analyze
and manipulate carbohydrates for research, diagnostic and pharmaceutical  
purposes. Glyko, Inc. developed a line of analytic instrumentation        
laboratory products that include an imaging system, analysis software and 
chemical analysis kits.                                                   

In October 1996, GBL formed BioMarin Pharmaceutical Inc. (BioMarin), a    
Delaware corporation in the development stage, to develop the Company's   
pharmaceutical products. BioMarin began business on March 21, 1997        
(inception) and subsequently issued 1.5 million shares of common stock to 
  GBL for $1.5 million. As consideration for a certain license agreement dated
June 1997, BioMarin issued GBL 7 million shares of BioMarin common stock. 
  Beginning in October 1997, BioMarin raised capital from third parties. As of
December 31, 1997, the Company began recording its share of BioMarin's net
loss utilizing the equity method of accounting. On June 30, 1998, GBL made
an additional $1 million investment in BioMarin.                          

On October 7, 1998, GBL sold to BioMarin 100% of the outstanding capital  
stock of Glyko, Inc. in exchange for 2,259,039 shares of BioMarin's common
 stock. In addition, BioMarin agreed to assume options, previously issued to
employees of Glyko, Inc., to purchase up to 585,969 shares of GBL's common
stock (exercisable into 255,540 shares of BioMarin common stock) and      
BioMarin paid $500 in cash.                                               

On April 13, 1999, the Company entered into a convertible note arrangement
with BioMarin in the amount of $4.3 million, as part of a $26 million     
convertible note financing. This note plus accrued interest was converted 
into 441,911 shares of BioMarin common stock concurrent with BioMarin's   
initial public offering on July 23, 1999.                                 

In May 2001, BioMarin completed two private placements of its securities, 
 raising total net proceeds of approximately $42.5 million. On May 16, 2001,
BioMarin sold 4,763,712 shares of common stock at $9.45 per share and, for
 no additional consideration, issued three-year warrants to purchase 714,554
 shares of common stock at an exercise price of $13.10 per share. On May 17,
2001 a fund managed by Acqua Wellington purchased 105,821 shares of common
  stock and received warrants to purchase 15,873 shares of common stock on the
same price and terms as the May 16, 2001 transaction.                     

In August 2001, BioMarin signed an amended agreement with Acqua Wellington
North American Equities Fund Ltd. (Acqua Wellington) for an equity        
  investment in BioMarin. The agreement allows for the purchase of up to $27.7
 million. Under the terms of the agreement, BioMarin will have the option to
  request that Acqua Wellington invest in BioMarin through sales of registered
common stock at a small discount to market price. The maximum amount that 
BioMarin may request to be bought in any one month is dependent upon the  
 market price of the stock (or an amount that can be mutually agreed-upon by
both parties) and is referred to as the "Draw Down Amount." Subject to    
  certain conditions, Acqua Wellington is obligated to purchase this amount if
requested to do so by BioMarin. In addition, BioMarin may, at its         
discretion, grant a "Call Option" to Acqua Wellington for an additional   
 investment in an amount up to the "Draw Down Amount" which Acqua Wellington
may or may not choose to exercise. During 2001, Acqua Wellington purchased
1,344,194 shares for $13.5 million ($13.2 million net of issuance costs). 
Under this agreement, Acqua Wellington may also purchase stock and receive
similar terms of any other equity financing by BioMarin.                  

K-7 

DEFM14A
310th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 310th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

On October 31, 2001, BioMarin purchased from IBEX Technologies Inc. (TSE: 
IBT) and its subsidiaries the intellectual property and other assets      
associated with the IBEX therapeutic enzyme drug products (including      
  Neutralase/TM/ and Phenylase) for $10.4 million, consisting of $2 million in
cash and $8.4 million in BioMarin common stock. In accordance with the    
purchase agreement, the number of common shares was based on the average  
  share price from September 5, 2001 to October 8, 2001, which resulted in the
issuance of 814,467 shares. The purchase also includes up to approximately
 $9.5 million in contingency payments upon regulatory approval of Neutralase
and Phenylase, provided that approval occurs within five years. All of the
purchase price plus related expenses are reflected on BioMarin's          
  consolidated statements of operations as in-process research and development
expenses totaling $11.7 million.                                          

On December 13, 2001, BioMarin completed a public offering of its common  
 stock. In the offering, BioMarin sold 8,050,000 shares, including 1,050,000
shares to cover over-allotments, at a price to the public of $12.00 per   
share, or a total offering price of $96.6 million. The net proceeds to    
BioMarin were approximately $90.4 million.                                

In December 2001, BioMarin decided to close the carbohydrate analytical   
business portion of Glyko, Inc., which provided all of Glyko, Inc.'s      
revenues. Accordingly, BioMarin recorded a Glyko, Inc. closure expense of 
 $7.9 million in the 2001 consolidated statements of operations. This charge
  consisted primarily of an impairment reserve against the unamortized balance
  of goodwill and other intangible assets related to the acquisition of Glyko,
  Inc. The majority of the Glyko, Inc. employees will be incorporated into the
BioMarin business and such employees will continue to provide necessary   
analytic and diagnostic support to BioMarin's therapeutic products        

On February 7, 2002, GBL announced that it had reached a definitive       
agreement with BioMarin under which BioMarin will acquire all of the      
outstanding common shares of GBL in exchange for common stock of BioMarin.
 The net effect of the transaction is that GBL shareholders will receive pro
rate approximately 11.4 million shares of common stock of BioMarin, being 
the same number of shares currently held by GBL.                          

On March 21, 2002, BioMarin purchased all of the outstanding stock of     
Synapse Technologies Inc. (a privately held Canadian company) for         
 approximately $10.2 million in BioMarin common stock plus future contingent
 milestone payments totaling approximately $5 million (as of March 31, 2002)
payable in either cash or common stock at BioMarin's discretion. BioMarin 
issued 885,240 shares of its common stock for the purchase.               

As a result of BioMarin's IPO, concurrent with the conversion of the notes
from GBL and other noteholders, the sale by BioMarin of common stock to   
Acqua Wellington, the sales by BioMarin of common stock in the private    
 placements and a follow-on offering, the exercise of BioMarin stock options
and warrants by third parties, the purchase of IBEX Technologies          
 intellectual property and other assets associated with the IBEX therapeutic
 enzyme drug products, and BioMarin's issuance of common stock in March 2002
for Synapse Technologies Inc., GBL's ownership of BioMarin's outstanding  
stock on March 31, 2002 (unaudited) and December 31, 2001 was 21.3% and   
21.7%, respectively.                                                      

From inception to March 31, 2002, GBL has incurred a cumulative deficit of
$61.9 million (unaudited) and expects to continue to incur losses due to  
GBL's share of BioMarin's net loss resulting from the ongoing research and
development of BioMarin's pharmaceutical product candidates through the   
proposed purchase of GBL by BioMarin discussed in Footnote 8. Accordingly,
without further investment in other companies or technologies, management 
 believes that GBL has sufficient cash to sustain planned operations for the
foreseeable future.                                                       

K-8 

DEFM14A
311th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 311th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

2. Summary of Significant Accounting Policies                                   

The accompanying financial statements and related footnotes have been     
prepared in conformity with U.S. generally accepted accounting principles 
 using U.S. dollars as substantially all of the Company's major transactions
were in U.S. dollars. The financial statements include the accounts and   
  operations of the Company and Glyko, Inc for the period from January 1, 1998
  through October 7, 1998, the date of the sale of Glyko, Inc. All significant
intercompany accounts and transactions have been eliminated. BioMarin's   
consolidated results of operations have been reported in the accompanying 
financial statements based on the equity method of accounting. The results
of operations of BioMarin have been reported in the Company's financial   
  statements for the three month periods ended March 31, 2002 and 2001 and for
  the years ended December 31, 2001, 2000 and 1999, based on the equity method
of accounting. Subsequent to October 7, 1998, the results of operations of
Glyko, Inc. have been consolidated into the results of operations of      
BioMarin.                                                                 

Use of Estimates:                                                         

The preparation of the Company's financial statements in conformity with  
U.S. generally accepted accounting principles requires management to make 
  certain estimates and assumptions that effect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of revenues
 and expenses during the reporting periods. Actual results could differ from
those estimates.                                                          

Cash and Cash Equivalents:                                                

 Cash and cash equivalents consist of amounts held with banks and short-term
investments with original maturities of less than three months when       
purchased.                                                                

Short-term Investments:                                                   

  GBL records its investments as held-to-maturity. Short-term investments were
  recorded at cost at December 31, 2000, which approximated fair market value.
These securities were comprised mainly of A1/P1 grade commercial paper. As
   of March 31, 2002 and December 31, 2001, there are no short-term investments.

Sale of Glyko, Inc. and Investment in BioMarin Pharmaceutical Inc.:       

BioMarin acquired Glyko, Inc. from GBL through the exchange of BioMarin   
  stock for Glyko, Inc. stock and accounted for the acquisition based upon the
fair market value of the BioMarin stock issued. In consolidating Glyko,   
  Inc., BioMarin recorded intangible assets, including goodwill, to the extent
that the fair market value of the stock issued exceeded the fair market   
value of the tangible assets of Glyko, Inc. acquired. However, as GBL     
exchanged one investment for another, it recorded the stock of BioMarin   
received at the historical cost basis of its investment in Glyko. GBL     
accounts for its investment in BioMarin using the equity method of        
  accounting. However, GBL does not record its share of the losses recorded by
BioMarin related to the amortization of intangible assets recorded in     
connection with the acquisition of Glyko. For the years ended December 31,
  2000 and 2001, BioMarin recorded a charge to operations for the amortization
of goodwill and other intangible assets of $1.6 million and $1.2 million, 
respectively. In December 2001, BioMarin decided to close the carbohydrate
analytical business portion of Glyko, Inc., which provided all of Glyko,  
Inc.'s revenues. Accordingly, BioMarin recorded a Glyko, Inc. closure     
expense of $7.9 million in the 2001 consolidated statements of operations.
This charge consisted primarily                                           

K-9 

DEFM14A
312th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 312th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

of an impairment reserve against the unamortized balance of goodwill and  
other intangible assets related to the acquisition of Glyko, Inc.         

In addition, to the extent that the issuance of stock by BioMarin to third
parties results in a change in the Company's ownership interest in the net
 assets of BioMarin, the Company reflects this change in its paid-in capital
and its investment in BioMarin. The Company recorded an increase to its   
additional paid-in capital of approximately $2.5 million, $0.4 million,   
$30.6 million and $1.4 million as a result of its share in BioMarin funds 
  raised by third parties for the three month periods ended March 31, 2002 and
2001(unaudited) and for the years ended December 31, 2001 and 2000,       
respectively.                                                             

Foreign Exchange:                                                         

As most of the Company's major transactions were in U.S. dollars, the     
Company has adopted the U.S. dollar as its functional currency. In        
 accordance with Statement of Financial Accounting Standard No. 52, "Foreign
Currency Translation", any assets and liabilities denominated in foreign  
currency are translated into U.S. dollars at the current rate of exchange 
  existing at year end and revenues and expenses are translated at the average
monthly exchange rates. Transaction gains and losses included in the      
statements of operations are not material.                                

Net Loss per Share:                                                       

Potentially dilutive securities outstanding at March 31, 2002 and 2001 and
at December 31, 2001, 2000 and 1999, respectively, include options for the
  purchase of 81,397, 45,000, 45,000, 7,750 and 291,000 shares of common stock
and warrants for the purchase of zero, zero, zero, zero and 2.2 million   
shares of common stock. These securities were not considered in the       
computation of dilutive loss per share because their effect would be      
anti-dilutive for the three month periods ended March 31, 2002 and 2001   
(unaudited) and for the years ended December 31, 2001, 2000 and 1999.     

3. New Accounting Pronouncements                                                

SFAS 141 and 142:                                                         

On June 29, 2001, the Financial Accounting Standards Board (FASB) approved
for issuance Statement of Financial Accounting Standards (SFAS) No. 141,  
Business Combinations, and SFAS No. 142, Goodwill and Intangible Assets.  
Major provisions of these Statements are as follows: all business         
combinations initiated after June 30, 2001 must use the purchase method of
accounting; the pooling of interests method of accounting is prohibited   
except for transactions initiated before July 1, 2001; intangible assets  
  acquired in a business combination must be recorded separately from goodwill
if they arise from contractual or other legal rights or are separable from
the acquired entity and can be sold, transferred, licensed, rented or     
exchanged, either individually or as part of a related contract, asset or 
liability; all acquired goodwill must be assigned to reporting units for  
purposes of impairment testing and segment reporting; effective January 1,
2002, goodwill and intangible assets with indefinite lives will not be    
amortized but will be tested for impairment annually using a fair value   
approach, except in certain circumstances, and whenever there is an       
  impairment indicator; other intangible assets will continue to be valued and
amortized over their estimated lives; in-process research and development 
acquired in business combinations will continue to be written off         
immediately; goodwill arising between June 29, 2001 and December 31, 2001 
will not be subject to amortization. Management is currently assessing the
impact of the new standards. The adoption of SFAS No. 142 in January 2002 
will not have a material impact on the Company's financial statements.    

K-10  

DEFM14A
313th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 313th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

SFAS 143:                                                                 

In June 2001, the FASB approved for issuance SFAS No. 143, "Accounting for
 Asset Retirement Obligations." SFAS No. 143 requires that the fair value of
a liability for an asset retirement obligation be recognized in the period
in which it is incurred and that the associated asset retirement costs be 
capitalized as part of the carrying value of the related long-lived asset.
 SFAS No. 143 will be effective January 1, 2002 for GBL. Management does not
expect this standard to have a material impact on GBL's financial position
or results of operations.                                                 

SFAS 144:                                                                 

  In August 2001, the FASB approved for issuance SFAS No. 144, "Accounting for
 the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 broadens the
presentation of discontinued operations to include more transactions and  
eliminates the need to accrue for future operating losses. Additionally,  
 SFAS No. 144 prohibits the retroactive classification of assets as held for
  sale and requires revisions to the depreciable lives of long-lived assets to
be abandoned. SFAS No. 144 will be effective January 1, 2002 for GBL.     
 Management does not expect this standard to have a material impact on GBL's
 financial position or results of operations. During the year ended December
31, 1999, the Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information". The Company concluded that it has 
only one operating segment.                                               

4. Income Taxes                                                                 

In connection with the sale of Glyko, Inc., the U.S. federal and state net
tax operating loss carryforwards and the related valuation allowances were
consolidated into the financial statements of BioMarin.                   

At December 31, 2001, the Company has net operating loss carryforwards for
Canadian income tax purposes of approximately $1.7 million, which began to
expire in 2000. A valuation allowance is placed on the net deferred tax   
assets to reduce them to an assumed net realizable value of zero.         

5. Note Receivable                                                              

 In November 1998, per the terms of the BioMarin acquisition of Glyko, Inc.,
 GBL loaned $712,261 to an officer of the Company to exercise expiring stock
  options. The loan matured in May 2001 and the note plus accrued interest was
repaid in the third quarter of 2001.                                      

6. Common Share Option Plan                                                     

  The Company has a common share option plan (the Plan) under which options to
  purchase common stock may be granted by the Board of Directors to directors,
 officers, consultants and key employees at not less than fair market value,
less any permissible discounts, on the date of grant. Options are         
  exercisable over a number of years specified at the time of the grant, which
 cannot exceed ten years. The maximum aggregate number of shares that may be
granted and sold under the Plan is 3 million shares.                      

The Company accounts for the Plan such that no compensation cost has been 
recognized, except for options granted to consultants, because, under the 
Option Plan, the option exercise price equals the market value of stock on
 the date of grant. In general, the Plan options vest over 48 months and all
options expire after 5 years or 90 days after employee termination.       

K-11  

DEFM14A
314th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 314th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

Had compensation cost for the Plan been determined consistent with FASB   
Statement No. 123, the Company's net loss would have been increased to the
following pro forma amounts:                                              

                                                                [Download Table]

                                               2001          2000          1999     
                                           ------------  ------------  ------------ 
                                                                                    
Net loss...................... As reported $(15,094,851) $(11,635,341) $(10,039,531)
                               Pro forma    (15,264,594)  (11,829,182)  (10,324,435)
Net loss per common share..... As reported $      (0.44) $      (0.34) $      (0.32)
                               Pro forma          (0.44)        (0.35)        (0.33)

The fair value of each option granted is estimated on the date of grant   
using the Black-Scholes option pricing model with the following           
  weighted-average assumptions used for grants in 2001 and 2000, respectively:
risk-free weighted average interest rates of 4.9% and 5.8%; expected      
dividend yield of zero percent; expected life of 4 years for the Plans'   
options; expected volatility of 78% and 193%.                             

Because the Statement 123 method of accounting has not been applied to    
options granted prior to January 1, 1995, the resulting pro forma         
  compensation cost may not be representative of that to be expected in future
years.                                                                    

 A summary of the status of the Company's Plan at December 31, 2001 and 2000
and changes during the years then ended is presented in the table and     
narrative below:                                                          

                                                                [Download Table]

                                            2001                2000        
                                    -------------------- -------------------
                                             Wtd. Avg.             Wtd. Avg.
                                    Shares  ex price (1)  Shares   ex price 
                                    ------  ------------ --------  ---------
                                                                            
Outstanding beginning of year......  7,750   Cdn.$5.85    291,000  Cdn.$1.24
Granted............................ 45,000   Cdn.$4.50     30,000  Cdn.$5.70
Exercised..........................    Nil               (299,500) Cdn.$1.37
Canceled........................... (7,750)  Cdn.$5.85    (13,750) Cdn.$5.70
                                    ------               --------           
Outstanding at end of Year......... 45,000   Cdn.$4.50      7,750  Cdn.$5.85
                                    ======               ========           
Exercisable at end of year......... 45,000                  7,750           

--------                                                                        
(1) The US$ equivalent of Canadian $1.00 at December 31, 2001 was approximately 
$0.6287.                                                                

  There are 857,324 options available for grant under the plan at December 31,
2001. The average remaining contractual life of the options outstanding at
December 31, 2001 is 3 years.                                             

7. Related Party Transactions                                                   

 For the year ended December 31, 2001 and 2000, we paid legal fees to Blake,
Cassels and Graydon LLP in which two of our directors, Mr. Kolada and Mr. 
Trossman are partners. During the years ended December 31, 2001 and 2000, 
the Company incurred expenses of $248,483 and $142,208, respectively,     
payable to Blake, Cassels and Graydon LLP, relating to general corporate  
services.                                                                 

Since October 8, 1998, the Company has agreed to pay BioMarin a monthly   
management and reporting fee for its services primarily relating to       
management, accounting, finance and government reporting. BioMarin had    
accrued receivables relating to these services of zero and $9,000 at      
December 31, 2001 and 2000, respectively.                                 

K-12  

DEFM14A
315th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 315th
GLYKO BIOMEDICAL LTD. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 

8. Subsequent Events                                                            

  On February 7, 2002, the Company signed a definitive agreement with BioMarin
to sell all of the Company's outstanding common shares in exchange for    
 approximately 11.4 million shares of freely tradable BioMarin common stock.
There will be no net effect to BioMarin's outstanding common stock, as    
 BioMarin plans to retire the existing shares of its restricted common stock
currently held by the Company upon closing. If the proposed purchase by   
BioMarin is approved by stockholders of BioMarin and the Company's        
 shareholders and relevant regulatory authorities, the Company will become a
 wholly-owned indirect subsidiary of BioMarin and will concurrently continue
 under the laws of British Columbia as a private company with no operations.

9. Quarterly Financial Data (unaudited)                                         

The Company's quarterly operating results have fluctuated in the past and 
may continue to do so in the future as a result of a number of factors    
  including, but not limited to, the Company's share of BioMarin's net losses,
which could fluctuate due to the completion of development projects and   
variations in levels of production and the Company's ownership share of   
BioMarin due to BioMarin's sale of common stock in the future.            

The Company's common shares have been traded on the Toronto Stock Exchange
since 1992. There were 112 common shareholders of record at December 31,  
   2001. No dividends were paid for the years ended December 31, 2001 and, 2000.

                                                        [Enlarge/Download Table]

                                                            Quarter Ended                    
                                         --------------------------------------------------- 
2001                                      March 31,     June 30,   September 30, December 31,
----                                     -----------  -----------  ------------- ------------
                                                                                             
Total revenue........................... $        --  $        --   $        --  $        -- 
Loss from operations....................     (70,335)     (89,074)     (158,208)    (144,405)
Net loss................................  (2,865,226)  (3,154,647)   (2,995,952)  (6,079,026)
Net loss per share, basic and diluted... $     (0.08) $     (0.09)  $     (0.09) $     (0.18)
Common share price per share:                                                                
   High................................. $      5.70  $      6.45   $      7.00  $      7.00 
   Low.................................. $      3.80  $      3.85   $      3.75  $      3.75 

                                                            Quarter Ended                    
                                         --------------------------------------------------- 
2000                                      March 31,     June 30,   September 30, December 31,
----                                     -----------  -----------  ------------- ------------
Total revenue........................... $        --  $        --   $        --  $        -- 
Loss from operations....................     (52,605)     (80,266)     (150,500)    (105,002)
Net loss................................  (3,736,387)  (2,246,263)   (2,498,602)  (3,154,089)
Net loss per share, basic and diluted... $     (0.11) $      (.07)  $     (0.07) $     (0.09)
Common share price per share:                                                                
   High................................. $     13.55  $      9.75   $      9.00  $      7.90 
   Low.................................. $      5.30  $      6.80   $      7.00  $      3.75 

K-13  

DEFM14A
316th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 316th
ANNEX L 

IBEX Technologies Inc./Technologies IBEX Inc. 
Therapeutic Enzymes Division  

Index to IBEX Technologies Inc. /Technologies IBEX Inc.-                        
Therapeutic Enzymes Division Financial Statements                               

                                                                [Download Table]
                                 
Auditors' Report............. L-2
Combined Balance Sheet....... L-4
Combined Statement of Loss... L-5
Notes to Financial Statements L-6

L-1 

DEFM14A
317th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 317th
AUDITORS' REPORT* 

To the Directors of                                                             
BioMarin Pharmaceutical Inc.,                                                   

We have audited the combined balance sheet of IBEX TECHNOLOGIES           
INC./TECHNOLOGIES IBEX INC.--THERAPEUTIC ENZYMES DIVISION ("Division") as at    
July 31, 2001 and the combined statement of loss for the year then ended. These 
financial statements are the responsibility of the Division's management. Our   
responsibility is to express an opinion on these financial statements based on  
our audit.                                                                      

We conducted our audit in accordance with generally accepted auditing     
standards in Canada and in the United States. Those standards require that we   
plan and perform an audit to obtain reasonable assurance whether the financial  
statements are free of material misstatement. An audit includes examining, on a 
test basis, evidence supporting the amounts and disclosures in the financial    
statements. An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall     
financial statement presentation.                                               

In our opinion, these combined financial statements present fairly, in all
material respects, the financial position of the Division as at July 31, 2001   
and the results of its operations for the year then ended in accordance with    
Canadian generally accepted accounting principles.                              

As disclosed in Note 1, the Division is a segment of IBEX TECHNOLOGIES    
INC./TECHNOLOGIES IBEX INC. ("IBEX") and has no separate legal status or        
existence.                                                                      

                           /s/ ARTHUR ANDERSEN LLP

Chartered Accountants                                                           

January 14, 2002                                                                
Montreal, Canada                                                                

* This report is a copy of a previously issued Arthur Andersen LLP report and   
this report has not been reissued by Arthur Andersen LLP.                   

L-2 

DEFM14A
318th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 318th
AUDITORS' REPORT--(Continued) 

Comments by Auditor on Canada-United States Reporting Difference                

United States reporting standards for auditors require the addition of an 
explanatory paragraph when the financial statements are affected by conditions  
and events that cast substantial doubt on the Division's ability to continue as 
a going concern, such as those described in Note 1 to the combined financial    
statements. Although we conducted our audit in accordance with both Canadian    
generally accepted auditing standards and United States Standards on Auditing,  
our report to the Directors dated January 14, 2002 is expressed in accordance   
with Canadian reporting standards which do not permit a reference to such       
conditions and events in the auditors' report when these are adequately         
disclosed in the financial statements.                                          

 United States reporting standards for auditors also require the addition of
an explanatory paragraph when the statement of cash flows is not presented,     
such as described in Note 8 to the combined financial statements. Although we   
conducted our audit in accordance with both Canadian generally accepted         
Auditing Standards and United States Standards on Auditing, our report to the   
Directors dated January 14, 2002 is expressed in accordance with Canadian       
reporting standards which do not permit a reference to that matter in the       
auditors' report when it is adequately disclosed in the financial statements.   

                           /s/ ARTHUR ANDERSEN LLP

Chartered Accountants                                                           

January 14, 2002                                                                
Montreal, Canada                                                                

L-3 

DEFM14A
319th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 319th
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC. - 
THERAPEUTIC ENZYMES DIVISION  
COMBINED BALANCE SHEET  
(See Basis of Presentation--Note 1) 

                                                                [Download Table]

                                                                   July 31, 
                                                                     2001   
                                                                  ----------
                                                                            
Assets                                                                      
Current Assets                                                              
   Cash.......................................................... $   14,364
   Accounts receivable (Note 3)..................................    228,469
   Prepaid expenses..............................................    105,702
                                                                  ----------
                                                                     348,535
Capital Assets (Note 4)..........................................    809,195
                                                                  ----------
                                                                  $1,157,730
                                                                  ==========
Liabilities and Net Investment by Ibex Technologies Inc.                    

Current Liabilities                                                         
   Accounts payable and accrued liabilities...................... $  697,690
Commitments and contingencies (note 6)                                      
Net investment by IBEX...........................................    460,040
                                                                  ----------
                                                                  $1,157,730
                                                                  ==========

Approved: 

--------------------------------------  

--------------------------------------  

The accompanying notes are an integral part of these combined financial 
statements. 

L-4 

DEFM14A
320th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 320th
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC. - 
THERAPEUTIC ENZYMES DIVISION  
COMBINED STATEMENT OF LOSS  
(See Basis of Presentation--Note 1) 

                                                        [Enlarge/Download Table]

                                                                                      For the  
                                                                                     Year Ended
                                                                                      July 31, 
                                                                                        2001   
                                                                                     ----------
                                                                                               
Expenses                                                                                       
   Research and development expenditures, net of refundable tax credits of $206,012. $1,483,109
   General and administrative expenses..............................................  1,275,853
   Amortization and write-down of capital assets....................................    301,415
                                                                                     ----------
Net loss............................................................................ $3,060,377
                                                                                     ==========

The accompanying notes are an integral part of these combined financial 
statements. 

L-5 

DEFM14A
321st Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 321st
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC.-  
THERAPEUTIC ENZYMES DIVISION  

NOTES TO COMBINED FINANCIAL STATEMENTS  

1. Basis of Presentation and Nature of Operations                               

IBEX Technologies Inc.--Therapeutic Enzymes Division ("Division") is the  
therapeutic business line of IBEX Technologies Inc. ("IBEX") developing enzymes 
for a variety of therapeutic applications, such as cardiovascular disease,      
wound healing and diseases of genetic origin. The combined financial statements 
of the Division represent the combination of accounts of the therapeutic        
business line from Canadian and U.S. entities (Technologies IBEX R&D Inc., IBEX 
Pharmaceuticals Inc., IBEX Technologies L.L.C. and IBEX Technologies            
Corporation).                                                                   

Since inception, the efforts of the Division have been devoted to the     
development of enzymes for a variety of therapeutic applications. To date, the  
Division has not earned revenues and is considered to be in the development     
stage. The Division is subject to a number of risks associated with companies   
at a similar stage of development, including ability to obtain adequate funding 
to support its development of products and its operations, dependence on key    
individuals and ability to retain qualified personnel, competition and          
regulatory approvals.                                                           

The accompanying combined financial statements have been prepared based on
Canadian generally accepted accounting principles applicable to a going concern 
which assumes that the Division will continue its operations for the            
foreseeable future and will be able to realize the carrying value of its assets 
and discharge its liabilities in the normal course of operations.               

 The Division has relied extensively upon IBEX for ongoing financial support
and accordingly, these carve-out combined financial statements are not          
necessarily indicative of the results of operations or financial position had   
the Division operated as an independent entity as at or for the date presented. 

These combined financial statements represent the business operations     
identified as the Therapeutic Enzymes Division of IBEX Technologies Inc. The    
Division is a segment of IBEX Technologies Inc. and has no legal status or      
existence. Accordingly, there is no share capital or retained earnings in the   
Division's accounts. In addition some disclosures including stock options, tax  
loss carry forward and commitments were not considered in the accompanying      
financial statements. The net investment by IBEX Technologies Inc. represents   
the capital employed in the Division in the form of investments and advances.   

The Division does not own title to the assets required to carry on the    
business. Assets including research and development equipment, administrative   
facilities and other assets to maintain operations are owned by IBEX.           

The Management of IBEX has allocated research and development expenditures
and general and administrative expenses to the Division based on specific       
allocations, the level of activity and the space occupied by the Division.      
Management believes this to be reasonable.                                      

The Division is presently performing research and development activities  
with respect to three main projects, Neutralase, Phenylase and Extravase, as    
well as several other projects in its efforts to develop enzymes for a variety  
of therapeutic applications.                                                    

Neutralase                                                                  

Neutralase is intended for the safe restoration of coagulation after the  
administration of heparin or low molecular weight heparins. The lead clinical   
application for Neutralase is bypass surgery, where a high dose of heparin is   
routinely given and is always reversed. The Division has completed the dose     
ranging portion of a 90 patient trial. It has also performed a trial with       
respect to the uses of Neutralase in angioplasty.                               

L-6 

DEFM14A
322nd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 322nd
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC.-  
THERAPEUTIC ENZYMES DIVISION  

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued) 

1. Basis of Presentation--(Continued)                                           

Phenylase                                                                   

  In the area of genetic disease, the Division is developing Phenylase for the
treatment of the genetic disease phenylketonuria, also known as PKU. Patients   
with this condition lack the ability to digest the amino acid phenylalanine,    
which builds toxic levels in the blood. This project is in the pre-clinical     
stage.                                                                          

Extravase                                                                   

Extravase is being developed for a number of medical applications which   
include protection against reperfusion injury following ischemia, reduction of  
restenosis following angioplasty and acceleration of wound healing in patients  
with venous ulcers. This project is in the pre-clinical stage.                  

The cost incurred for projects under development are as follows:          

                                                                [Download Table]

                                           2001   
                                        ----------
                                                  
Neutralase                                        
Research costs expensed during the year $  720,332
Capital assets                                    
   Balance, beginning and end of year..    859,745
Total cost for Neutralase for the year.    720,332

Phenylase                                         
Research costs expensed during the year    612,097
Capital assets                                    
   Balance, beginning of year..........     63,747
   Additions...........................     31,651
   Balance, end of year................     95,398
Total cost for Phenylase for the year..    643,748

Extravase                                         
Research costs expensed during the year    231,324
Capital assets                                    
   Balance, beginning and end of year..  1,888,463
Total cost for Extravase for the year..    231,324

L-7 

DEFM14A
323rd Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 323rd
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC.-  
THERAPEUTIC ENZYMES DIVISION  

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued) 

2. Significant Accounting Policies                                              

These combined financial statements have been prepared based on IBEX      
Management's assumptions in accordance with Canadian generally accepted         
accounting principles consistently applied within the framework of the          
accounting policies described below.                                            

Use of estimates                                                            

The presentation of financial statements in accordance with Canadian      
generally accepted accounting principles requires management to make estimates  
and assumptions that affect the reported amounts of assets and liabilities and  
disclosure of contingencies at the date of the financial statements and the     
reported amounts of revenues and expenses during the reporting period. Actual   
results could differ from those estimates.                                      

Cash and cash equivalents                                                   

The Division's cash and cash equivalents consist of cash on hand.         

Foreign exchange                                                            

Monetary assets and liabilities expressed in foreign currencies are       
translated at year-end rates and non-monetary assets and liabilities are        
translated at historical exchange rates. Revenues and expenses expressed in     
foreign currencies are translated at the monthly average rate throughout the    
year. Resulting gains and losses are included in losses for the year.           

Currency risk                                                               

 The Division is exposed to foreign exchange risk by virtue of the fact that
a portion of the Division's expenses are denominated in U.S. dollars. Any       
fluctuations in the U.S. dollars could have an impact on the financial results  
of the Division.                                                                

Capital assets                                                              

Capital assets are accounted for at cost.                                 

Amortization is based on their estimated useful life using the following  
methods and rates:                                                              

                                                                [Download Table]

                                     Methods          Rates    
                               ------------------- ------------
                                                               
Machinery and equipment....... Diminishing balance Varying from
                                                     20% to 30%
Furniture and fixtures........ Diminishing balance          20%
Patents and licences..........       Straight-line     17 years

L-8 

DEFM14A
324th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 324th
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC.-  
THERAPEUTIC ENZYMES DIVISION  

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued) 

2. Significant Accounting Policies (Continued)                                  

Fair value of financial instruments                                         

  The Division has evaluated the fair value of its financial instruments based
on current interest rate environment, related market values and current pricing 
of financial instruments with comparable terms. The carrying value of its       
financial instruments is considered to approximate fair value.                  

Research and development                                                    

Research and development costs are expensed as incurred unless the        
development cost meet the generally accepted criteria for deferral. As at July  
31, 2001, no such costs have been deferred in the accounts of the Division.     

Government assistance relating to research and development activities is  
reflected as a reduction of research and development expenses in these combined 
financial statements when it is earned and collectability is reasonably assured.

Income taxes                                                                

The Division uses the liability method of accounting for income taxes.    
Future income taxes are provided for temporary differences between the carrying 
amounts of assets and liabilities for financial reporting purposes and the      
amounts used for tax purposes, computed based on rates and provisions of        
enacted or substantially enacted tax laws that are expected to be in effect in  
the year in which the differences are expected to be recovered or settled. The  
Division reviews the valuation of its future income tax assets and liabilities  
and records adjustments, if necessary, to reflect their realizable amount.      

3. Accounts Receivable                                                          

                                                                [Download Table]

                                      2001  
                                    --------
                                            
Refundable investment tax credits.. $206,012
Other..............................   22,457
                                    --------
                                    $228,469
                                    ========

L-9 

DEFM14A
325th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 325th
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC.-  
THERAPEUTIC ENZYMES DIVISION  

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued) 

4. Capital Assets                                                               

                                                                [Download Table]

                                                                 2001               
                                                   ---------------------------------
                                                              Accumulated     Net   
                                                      Cost    Amortization BookValue
                                                   ---------- ------------ ---------
                                                                                    
Machinery and equipment........................... $3,505,628  $3,115,750  $389,878 
Furniture and fixtures............................    525,930     489,202    36,728 
Patents and licenses..............................    540,938     158,349   382,589 
                                                   ----------  ----------  -------- 
                                                   $4,572,496  $3,763,301  $809,195 
                                                   ==========  ==========  ======== 

5. Income Taxes                                                                 

 The Division is not a separate legal entity for purposes of remitting taxes
and filing income tax returns. Income taxes for the Division are included in    
IBEX's income tax returns and paid by IBEX. Consequently, the benefits of       
income tax losses incurred by the IBEX Division have not been disclosed in      
these financial statements since they would be available only to IBEX. For the  
same reason, the research and development expenditures incurred by the Division 
but not deducted for tax purposes and the non-refundable unclaimed investment   
tax credits have not been disclosed.                                            

The refundable tax credits have been accounted for based on the assumption
that the Division was not controlled by non-residents.                          

6. Commitments and Contingencies                                                

IBEX entered into an agreement with BASF Bioresearch Corporation ("BBC")  
whereby IBEX has committed to pay to BBC an amount totaling US$1,050,000 if and 
when IBEX obtains approval for the marketing and sale of the Heparinase I drug  
(Neutralase) from the Food and Drug Administration ("FDA"). This agreement is   
transferred to BioMarin Enzymes Inc. following the acquisition (See Note 7).    

Pursuant to employment contracts entered into by IBEX with certain of its 
key employees, the Division will be committed to payments as follows:           

                                                                [Download Table]

                                                     2001  
                                                   --------
                                                           
2002.............................................. $340,166
2003..............................................   86,500

L-10  

DEFM14A
326th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 326th
IBEX TECHNOLOGIES INC./TECHNOLOGIES IBEX INC.-  
THERAPEUTIC ENZYMES DIVISION  

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued) 

7.  Subsequent Event                                                            

On October 31, 2001, BioMarin Pharmaceutical Inc. and its subsidiaries,   
BioMarin Pharmaceutical Nova Scotia Company and BioMarin Enzymes Inc.           
("BioMarin"), acquired the rights to the IBEX division of therapeutic enzymes.  
Under the terms of the agreement, BioMarin acquired from IBEX the         
intellectual property and other assets associated with the IBEX therapeutic     
enzyme product candidates, including Neutralase, Phenylase and Extravase. In    
exchange, IBEX received 814,467 common shares of BioMarin, $3.2 million in cash 
and in addition, up to a maximum of $14.6 million in cash upon FDA approval of  
its lead drugs, Neutralase ($9.1 million) and Phenylase ($5.5 million),         
provided approval occurs within five years from the acquisition date.           
  IBEX retained the diagnostic rights to its high-margin enzymes business plus
certain therapeutics rights with respect to its oral protein protective         
technology in areas that are non-competitive with BioMarin. IBEX will continue  
to maintain its pilot microbial fermentation facility, and its laboratories and 
office facilities in Montreal. IBEX will also provide certain facilities and    
laboratories and fermentation services to BioMarin.                             

8.  Cash Flows                                                                  

No statement of cash flows were prepared since the information is not     
readily available.                                                              

L-11  

DEFM14A
327th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 327th
                                                        [Enlarge/Download Table]
                                                                                                                       
                                                    FORM OF PROXY                                                      
                                             BIOMARIN PHARMACEUTICAL INC.                                              
                                            ANNUAL MEETING OF STOCKHOLDERS                                             
                                                    August 13, 2002                                                    
                                   THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF                                   
                                       DIRECTORS OF BIOMARIN PHARMACEUTICAL INC.                                       

  The undersigned stockholder of BioMarin Pharmaceutical Inc., a Delaware corporation ("BioMarin"), hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and the Joint Proxy Statement and Management Proxy Circular,   
each dated July 5, 2002 and hereby appoints Fredric D. Price and Kim R. Tsuchimoto, or either of them, as proxy and    
attorney-in-fact, with full power of substitution, on behalf and in the name of the undersigned, to represent the      
undersigned at the annual meeting of the stockholders of BioMarin to be held on August 13, 2002 at Embassy Suites      
Hotel, 101 McInnis Parkway, San Rafael, California 94903 at 10:00 a.m., California time (the "Annual Meeting"), or any 
adjournment or postponement thereof, and to vote all shares of common stock of BioMarin, which the undersigned would be
entitled to vote, if then and there personally present, at the Annual Meeting on the matters set forth on the reverse  
side.                                                                                                                  
  1.  Election of Directors. Nominees: Fredric D. Price, Franz L. Cristiani, Phyllis I. Gardner, M.D., Erich Sager,    
Vijay B. Samant and Gwynn R. Williams.                                                                                 

                              [_] FOR                                                [_] WITHHOLD FOR ALL              

     INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space     
provided below:                                                                                                        
     __________________________________________________________________________________________________________________
  2.  Approval of Transaction. Proposal to approve a transaction for BioMarin to acquire all of the outstanding shares 
of capital stock of Glyko Biomedical Ltd., a corporation existing under the laws of Canada, including, without         
limitation, the issuance of up to 11,367,617 shares of BioMarin common stock in connection with the transaction.       

                                [_] FOR                          [_] AGAINST                    [_] ABSTAIN            

  3.  Other Matters. In their discretion, upon such other matters (including procedural and other matters relating to  
the conduct of the Annual Meeting) as properly come before the Annual Meeting or any adjournment or postponement       
thereof as described in the Notice of Annual Meeting of Stockholders and the Joint Proxy Statement and Management Proxy
Circular.                                                                                                              
                                [_] FOR                          [_] AGAINST                    [_] ABSTAIN            

                                        (PLEASE DATE AND SIGN ON REVERSE SIDE)                                         

 [GRAPHIC]

 Border -- right angle

DEFM14A
328th Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 328th
     BioMarin's board of directors recommends a vote FOR Proposals 1 and 2. If
 not otherwise directed, this proxy will be voted FOR Proposals 1 and 2, and
 in accordance with the discretion of the proxy holders on any other matters
(including procedural and other matters relating to the conduct of the    
Annual Meeting) as properly come before the Annual Meeting or any         
adjournment or postponement thereof.                                      

    Dated this ______ day of __________________________ , 2002

         _______________________________________________________________
         Name of Stockholder
         _______________________________________________________________
         Signature(s) of Stockholder

This proxy should be marked, dated and signed by the  
       stockholder(s) exactly as his or her name appears hereon, and
     returned promptly in the enclosed envelope. Persons signing
         in fiduciary capacity should so indicate. If shares are held by
 joint tenants or as community property, both must sign.
   When signing as executor, administrator, trustee or other
representative, please give your full title.          

PLEASE DATE, SIGN AND MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.

 [GRAPHIC]

Border -- left angle

DEFM14A
Last Page of 329
TOC
1st
Previous
Next
↓Bottom
Just 329th
 FORM OF PROXY

GLYKO BIOMEDICAL LTD. 

Solicited by Management for the Special Meeting of Shareholders 
to be held at 10:00 a.m. (Toronto time) on August 15, 2002  

The undersigned holder of common shares ("Common Shares") of Glyko        
Biomedical Ltd. (the "Corporation") hereby revokes any proxy previously given   
and appoints Joerg Gruber, Chairman and Director of the Corporation, or,        
failing him, John Kolada, Director and Secretary of the Corporation, or instead 
of either of them, ________________________________________ as the nominee and  
proxy of the undersigned, with full power of substitution to attend, vote and   
otherwise act for the undersigned at the special meeting (the "Meeting") of the 
shareholders of the Corporation to be held at 10:00 a.m. (Toronto time) on      
August 15, 2002 and at any adjournment thereof and on every ballot that may     
take place in consequence thereof to the same extent and with the same power as 
if the undersigned were personally present at the Meeting or adjournment        
thereof, with the authority to vote at the proxyholder's discretion except as   
otherwise specified below. Without limiting the general powers hereby           
conferred, the undersigned hereby directs the proxyholder to vote the Common    
Shares represented by this proxy in the following manner:                       

1. VOTE FOR [_] or AGAINST [_] (or, if not specified, VOTE FOR), with or        
 without variation, the special resolution approving the plan of arrangement
in respect of the transaction with BioMarin Pharmaceutical Inc. (the      
"Arrangement Resolution"), which is included as Annex C to the joint proxy
circular of Glyko and BioMarin dated as of July 5, 2002 (the "Circular"). 

2. VOTE FOR [_] or AGAINST [_] (or, if not specified, VOTE FOR), with or        
without variation, the special resolution approving the exportation of the
Corporation from the federal jurisdiction of Canada and the continuance of
 the Corporation into the jurisdiction of British Columbia (the "Continuance
Resolution"), which is included as Annex D to the Circular.               

3. To vote on such other business as may properly come before the Meeting.      

This Proxy, when properly executed, confers discretionary authority with  
respect to amendments or variations to matters identified in the Notice of      
Meeting and with respect to such other matters as may properly come before the  
Meeting.                                                                        

This Proxy is solicited on behalf of management of the Corporation. Each  
holder of Common Shares has the right to appoint a person (who need not be a    
shareholder of the Corporation) other than the persons specified above to       
attend and act on his, her or its behalf at the Meeting. Such right may be      
exercised by inserting the name of the person to be appointed in the space      
provided, or by completing another proper form of proxy and, in either case,    
delivering the proxy in the enclosed envelope or by facsimile to Computershare  
Trust Company of Canada, Proxy Department, 100 University Avenue, 9/th/ Floor,  
Toronto, Ontario, Canada M5J 2Y1, facsimile number (416) 981-9800. The form of  
proxy must be received by Computershare Trust Company of Canada prior to 5:00   
p.m. (Toronto time) on August 13, 2002 or, in the event that the meeting is     
adjourned or postponed, prior to 5:00 p.m. (Toronto time) on the second         
business day prior to the day fixed for the adjourned or postponed meeting.     

This proxy may be revoked by following the procedures set forth in the    
accompanying management proxy circular or otherwise as permitted by law.        

                                             DATED the ________ day of
                                             __________________, 2002.

                                                 _____________________________
                                                 (Please print name)

                                                 _____________________________
                                                (Signature of Shareholder)
                                 Instructions:
                                         1. The signature of the
                                                 Shareholder on this Proxy
                                                   must be exactly the same as
                                             the name in which the
                                         Common Shares are
                                                   registered. This Proxy must
                                                  be executed by you or your
                                                   attorney duly authorized in
                                                writing or, if you are a
                                                  corporation, by an officer
                                                or attorney thereof duly
                                                  authorized in writing. The
                                           corporate seal of a
                                             shareholder that is a
                                             corporation should be
                                affixed.

                                               2. Please date this Proxy. If
                                                  this Proxy is not dated in
                                              the space provided, it
                                                   shall be deemed to bear the
                                                   date on which it was mailed
                                                  to you by the Corporation.