Fresenius Biotech today announced that the European Commission has granted Orphan Drug Designation for the removab^® (catumaxomab) trifunctional antibody to treat gastric cancer. The Orphan Drug Designation entitles Fresenius to up to 10 years market exclusivity in the EU upon marketing approval.

Results from an ongoing phase II study using catumaxomab in about 50 gastric-cancer patients are expected in the second half of 2007. A previous phase I study in patients with advanced peritoneal carcinomatosis (spread and growth of tumor cells in the abdominal cavity) also included patients with gastric cancer and was completed successfully.

Gastric cancer affects an average of three out of 10,000 people in the EU and accounts for about twelve percent of cancer fatalities around the world, making it the second-leading cause of death caused by cancer. Despite medical advances, gastric cancer patients continue to face a low survival rate. Most patients are first diagnosed at an advanced stage because early symptoms are missing or are very unspecific. In addition, many patients face early relapse after surgical resection of the tumor and subsequent chemotherapy, making new, innovative treatments for gastric cancer a high medical need.

Orphan Drug

The EU grants the Orphan Drug Designation to medicinal products used for rare, life-threatening or chronic diseases that affect no more than five in every 10,000 people in the EU and for which no sufficient effective treatment exists. The European Medicines Agency, the EU pharmaceutical regulatory body, supports businesses that research, develop and market such medicines during the development and regulatory approval process.

At the Extraordinary General Meeting in Frankfurt, Germany, a large majority of Fresenius AG's shareholders approved the Management and Supervisory Boards' proposal to convert the Company's legal form from a German stock corporation (Aktiengesellschaft) into a European Company (Societas Europaea – SE). A share split with capital increase from the Company's funds that will triple the number of shares issued was also approved by a vast majority.

The new legal form reflects the international focus of Fresenius Group's business. Through the conversion, all employees in the European Union and in the signatory states to the European Economic Area may now participate in appointing employee representatives to the Supervisory Board. In addition, Fresenius SE's Supervisory Board will continue to have twelve members. Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG, said: "We are convinced that with the new legal form we can successfully continue our high-quality and efficient corporate governance. The SE particularly facilitates an open and international corporate culture. The conversion of Fresenius AG into a European Company and the share split are two consistent steps in the development of the Company. Combined with our long-term strategy focused on profitable growth, these steps will further strengthen Fresenius."

At the Extraordinary General Meeting, 99.99 percent of the ordinary share capital represented approved the conversion of Fresenius AG into an SE. An SE is a public limited-liability company under European law. The conversion will have no effect on the Company's corporate structure and management organization; the legal and economic identity will be preserved. The conversion becomes effective upon the registration in the commercial register. This is scheduled in the third quarter of 2007 after the completion of the procedure for the involvement of the employees.

99.99 percent of the represented ordinary share capital approved the share split. The subscribed capital of Fresenius AG currently amounts to approximately € 131.7 million. It is divided into 25,725,646 ordinary shares and 25,725,646 preference shares. Through a conversion of capital reserves, the subscribed capital will first be increased to approximately € 154.4 million and then divided into 77,176,938 ordinary shares and 77,176,938 preference shares. The new proportionate amount of the subscribed capital will be 1 € per share. After the share split, every holder of an ordinary share will hold three ordinary shares and every holder of a preference share will hold three preference shares. As a result of the share split, the share price will be reduced arithmetically without affecting the overall value for shareholders. The proposed share split is intended to promote trading activity in Fresenius shares and to increase the shares' attractiveness for a broader group of investors. The share split becomes effective upon the registration in the commercial register, which is expected in the first quarter of 2007.

About 79.95 percent of the ordinary share capital was represented at the Extraordinary General Meeting. Only ordinary shareholders were entitled to vote.

Fresenius today announced encouraging results from a phase II/III pivotal study on malignant ascites in patients with ovarian cancer using the trifunctional antibody removab^® (catumaxomab). The antibody showed a clear advantage over a therapy with puncture alone. The median puncture-free survival period (primary endpoint) in the group of patients treated with removab^® was significantly longer compared to the control group and clinically relevant. The median puncture-free survival was 52 days in the removab^® group versus 11 days in the control group (p< 0.0001).

Positive results were also achieved with regard to key secondary endpoints. The median time to the first therapeutic puncture was 71 days (control group: 11 days; p< 0.0001). In contrast to the primary endpoint, patients who died before the next puncture were not included in this metric. Also, the EpCAM-positive tumor cell concentration in the ascites fluid decreased significantly in patients treated with removab^® (p< 0.0009). At the same time, an increase in CD45-positive leukocytes was seen. Both results indicate a direct anti-tumor effect of the trifunctional antibody.

Moreover, removab^® showed a very good safety profile. Side effects were mild to moderate with fever, nausea and vomiting being the most common. Pathologic increases of liver parameters and undesirable changes in white blood cell counts were also mild to moderate, transient and without clinical relevance.

"To date, there are only limited therapy options for ovarian cancer patients with malignant ascites. Our data indicate that removab^® could become an important new therapy option for this disease. The positive results of the phase I/II study have been fully confirmed by this pivotal phase II/III trial," said Dr. Thomas Gottwald, President Fresenius Biotech.

The results of this two-arm, randomized, open-label study include treatment data of 129 ovarian cancer patients with ascites. The removab^® arm included 85 patients, of which 73 received all four doses of 10, 20, 50 und 150 µg each. The intraperitoneal infusions were administered over a six-hour period in intervals of three to four days.

Data on overall survival in connection with the study are expected in the first half of 2007 due to the longer follow-up period associated with this secondary endpoint. Market launch of removab^® is expected in 2008.

The current phase II/III study with the trifunctional antibody removab^® included a total of 257 patients. The results of the second group (128 patients) with tumor diseases other than ovarian cancer (e.g. gastric cancer) are expected for the first half of 2007.

Conference Call
Fresenius AG will host an conference call today, Monday, December 18, 2006, at 3.30 p.m. CET / 9.30 a.m. EST. The live audio webcast of the conference call can be followed at www.fresenius-ag.com. A replay will be available shortly after the call.

Puncture-free survival period
Period between the last infusion (control group: day of the puncture) and the first subsequent necessary puncture or death, which ever occurs first.

Trifunctional Antibodies
Trifunctional antibodies are developed by Fresenius Biotech in cooperation with TRION Pharma. Trifunctional antibodies are proteins that bring together cancer cells with two different cell types of the immune system: T-cells and accessory cells (e.g., natural killer cells, macrophages). This mode of action of the trifunctional antibody is the basis for an immune response against the tumor.

Fresenius Biotech is a company of the Fresenius health care group, focused on the development and marketing of biopharmaceuticals in the fields of oncology, immunology and regenerative medicine.
Additional information is available on the Internet at www.fresenius-biotech.de.

Fresenius ProServe today announced that it has signed a definitive agreement to sell its subsidiary Pharmaplan GmbH to NNE A/S (NNE). NNE is a wholly owned subsidiary of Novo Nordisk A/S, Copenhagen, a major pharmaceutical company with 22,000 employees worldwide and annual sales of € 4,531 million in 2005.

Pharmaplan provides consulting, engineering and qualification/validation services for the pharmaceutical and GMP-oriented industry worldwide. In 2005, the company had sales of about € 49 million. Pharmaplan currently has about 320 employees, including 130 in Germany. The sale of Pharmaplan is a further step by Fresenius ProServe to focus on its business with hospitals and other healthcare facilities. The company offers the full line of services from the planning and construction of hospitals to technical and operational management in its two core areas of hospital management (HELIOS Kliniken) and hospital engineering and services (VAMED). Fresenius ProServe is now well-positioned to successfully participate in the privatization of the hospital market.

NNE is a leading engineering company focused on the biotech and pharma industries. The company is a full-service provider offering conceptual design, validation and operational support. Pharmaplan and NNE's activities and markets complement each other well. The combination of both businesses offers Pharmaplan and its employees exceptional opportunities for future development.

The transaction requires antitrust approval. The Company anticipates the closing of the transaction in the first quarter of 2007. Pharmatec, a Pharmaplan subsidiary with production sites in Dresden, Germany and Ternitz, Austria will not be included in the transaction and will be divested at a later date. Pharmatec manufactures high quality pure steam, pure water and sterilization equipment for the pharmaceutical industry.

Fresenius Biotech and the U.S. Company Enzon Pharmaceuticals, Inc. today announced the recruitment of the first North American patient for a phase II study for approval of ATG-Fresenius S. The polyclonal antibody suppresses the immune reaction against transplanted organs to reduce the risk of rejection. It is already marketed in over 60 countries. The entry of the first patient into the clinical study is an important milestone to introduce this successful product in the North American market. The cooperation partner Enzon is responsible for the clinical development and approval in the U.S., Fresenius Biotech will manufacture and deliver ATG-Fresenius S.

Enzon and Fresenius Biotech also announced today that the U.S. Food and Drug Administration (FDA) granted Fast Track Status in the approval process for the use of ATG-Fresenius S in lung transplantation. The Fast Track process provides a particularly close working relationship with the FDA in order to accelerate the development and approval of pharmaceuticals that are appropriate to treat critically ill patients where adequate therapeutic modalities are not available.

A phase III study using ATG-Fresenius S in renal transplant patients is currently being prepared.

Fresenius Biotech signed a cooperation contract with Enzon Pharmaceuticals in 2003 for the U.S. approval of ATG-Fresenius S. This product is expected to be introduced to the U.S. market in 2007.

Enzon Pharmaceuticals is a biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutics to treat life-threatening diseases. Further information can be found on the Company's website www.enzon.com.

Fresenius Kabi AG, a subsidiary of Fresenius AG, today announced an agreement to acquire Labesfal – Laboratório de Especialidades Farmacêuticas Almiro S.A. The company is headquartered in Campo de Besteiros in central Portugal and offers intravenously administered drugs (I.V. drugs) for the domestic market. This acquisition will significantly expand the I.V. drug portfolio of Fresenius Kabi, the European market leader in infusion and nutrition therapy. Fresenius Kabi plans to introduce Labesfal's products throughout Europe. The acquisition is an important step in the company's growth strategy. "We have announced in the past that we intend to expand the I.V. drug business of Fresenius Kabi. The purchase of Labesfal offers excellent growth opportunities in this attractive market segment," said Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG.

Privately-owned Labesfal ranks among the 10 most successful companies in Portugal. In 2004, the company achieved sales of € 56 million and employed approximately 320 people. The acquisition will be accretive to Fresenius Kabi's earnings in the first year and will lead to a further improvement in the EBIT margin of the company. Labesfal holds an excellent position on the Portuguese hospital market with a comprehensive product portfolio of generic I.V. drugs such as antibiotics, analgesics and local anesthetics as well as for treating gastrointestinal diseases.

Labesfal's state-of-the-art production site in Campo de Besteiros has adequate capacity for international expansion. For 2005, Fresenius Kabi plans to establish a competence center for the production of I.V. drugs at this location. The company has significant know-how in the production of sterile infusion solutions.

Fresenius Kabi is a leader in the development, production and distribution of infusion therapy products for hospitals. Labesfal is an excellent fit in this segment. Fresenius Kabi plans to use its existing sales and marketing network to introduce Labesfal's I.V. drug products to the European market. The products are expected to receive European regulatory approval within the next two years. Fresenius Kabi estimates the market size of the European hospital market for the I.V. drugs portfolio of Labesfal at € 1.2 billion*.

The former owner of Labesfal, Joaquim Coimbra, will become Chairman of the newly-created advisory board of the company. The management team will in-clude current Labesfal management and local Fresenius Kabi executives.

The acquisition requires the approval of Portuguese antitrust authorities.

* Source: Fresenius Kabi Internal Research

Conference Call

A conference call to inform about the acquisition will be held on January 7, 2005 at 1 p.m. CET. All investors are cordially invited to follow the conference call in a live broadcast over the Internet at www.fresenius-ag.com / Investor Relations / Presentations.
A replay of the call will be available on our website shortly after the call.

• Sales: € 7.27 billion, + 8 % constant currency, + 3 % at actual exchange rates
   
• EBIT: € 845 million, + 15 % constant currency, + 8 % at actual exchange rates
   
• Net Income: € 168 million, + 55 % constant currency, + 46 % at actual exchange rates
   
• Strong sales and earnings growth at Fresenius Medical Care
• Excellent business development and significantly improved EBIT margin at Fresenius Kabi
• Fresenius ProServe within expectations
• Strong sales and earnings growth expected for 2005

Dividend increase proposed
2004 was a very successful year for Fresenius. Based on the Group's excellent financial results, the Management Board will propose to the Supervisory Board a 10 % dividend increase to € 1.35 per ordinary share (2003: € 1.23) and € 1.38 per preference share (2003: € 1.26). This will mark the 12th consecutive year of a dividend increase. The total dividend distribution will be € 55.9 million (2003: € 51.0 million).

Positive Group outlook for 2005
For 2005, Fresenius expects a constant currency sales increase of 6 to 9 %. Net income is projected to grow by 15 to 20 % in constant currency. All business segments are expected to contribute to this increase.

Fresenius is planning to invest in growth in 2005: Investments in property, plant and equipment and intangible assets are projected to increase to approximately € 400 - 450 million; acquisition spending is planned to grow to about € 400 million.

Strong organic sales growth
In 2004, Group sales increased 8 % in constant currency. Organic growth was 6 %, while acquisitions contributed 2 % to the increase in sales. Currency translation effects had an impact of -5 %. At actual exchange rates, sales were € 7,271 million, 3 % above last year's figure of € 7,064 million.

In Europe, sales increased 4 % despite cost cutting measures in the health care sector and price pressure in Germany. North America performed strongly with sales growing 9 % in constant currency. Asia-Pacific, Latin America and Africa achieved double-digit constant currency growth rates.

 



Excellent earnings growth
Fresenius achieved excellent earnings growth rates: EBITDA rose 11 % in constant currency and 5 % at actual exchange rates to € 1,160 million (2003: € 1,106 million). EBIT rose 15 % in constant currency and 8 % at actual exchange rates to € 845 million (2003: € 781 million). The EBIT margin improved from 11.1 % in 2003 to 11.6 % in 2004.

Net interest expense continued to improve to € -209 million, € 40 million below last year's € -249 million due to a lower debt level as well as enhanced terms. Currency translation effects also had a favorable impact of € 11 million.

In 2004, the tax rate decreased to 39.8 %. The tax rate of 41.9 % in 2003 was mainly due to one-time expenses at Fresenius ProServe.

Minority interests rose to € 215 million (2003: € 194 million). Minority shareholders in Fresenius Medical Care account for 95 % of minority interests.

Net income rose 55 % in constant currency and 46 % at actual exchange rates to € 168 million (2003: € 115 million). Operating income growth at Fresenius Medical Care and Fresenius Kabi was the key driver of this increase. In addition, lower one-time expenses at Fresenius ProServe as well as lower Group interest expenses had a positive impact. Excluding the one-time expenses at Fresenius ProServe in 2003 and 2004 Group net income increased 25 % in constant currency and 18 % at actual exchange rates.

Earnings per ordinary share were € 4.08 from € 2.79 in 2003. Earnings per preference share were € 4.11 (2003: € 2.82). This is an increase of 46 %.
 

Investments on target
In 2004, Fresenius invested € 421 million (2003: € 430 million). Investments for property, plant and equipment and intangible assets decreased to € 308 million (2003: € 339 million) and acquisitions increased to € 113 million (2003: € 91 million).

44 % of the total investments were made both in Europe and North America, 7 % in the Asia-Pacific region and 5 % in Latin America and Africa.
 

Record cash flow
Operating and free cash flow reached new records in 2004: Operating cash flow rose 10 % to € 851 million (2003: € 776 million), mainly due to Group net income growth and improved working capital management. The operating cash flow margin rose to 11.7 % of sales up from 11.0 % in 2003, an increase of 70 basis points. Free cash flow before acquisitions and dividends increased 24 % to € 565 million (2003: € 454 million). After acquisitions and dividends free cash flow rose 31 % to € 353 million (2003: € 269 million) despite increased spending on acquisitions (€ -90 million, net) and dividends (€ -122 million).
 

Solid balance sheet
Total assets decreased 2 % to € 8,188 million (December 31, 2003: € 8,347 million). In constant currency, assets grew by 2 %. Current assets were € 2,755 million (December 31, 2003: € 2,744 million). In constant currency, current assets rose 3 %, primarily driven by the induction of Fresenius Medical Care's receivables securitization program.

Group debt decreased € 413 million to € 2,735 million as of December 31, 2004 (€ 2,824 million in constant currency) compared to € 3,148 million as of December 31, 2003. These figures include liabilities related to the receivables securitization program.

The key ratio net debt/EBITDA improved significantly to 2.2 on December 31, 2004, as a consequence of both EBITDA growth and debt reduction on the back of the excellent cash flow development (December 31, 2003: 2.7).

Shareholders' equity including minority interests rose 4 % to € 3,347 million compared to € 3,214 million on December 31, 2003 (constant currency: +9 %). The equity ratio including minority interests improved to 40.9 % (December 31, 2003: 38.5 %).

Number of employees slightly increased
As of December 31, 2004, Fresenius had 68,494 employees worldwide, an increase of 3 % (December 31, 2003: 66,264).
 

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer as well as cell therapies for the treatment of the immune system. In the field of polyclonal antibodies, Fresenius Biotech has successfully marketed ATG-Fresenius S for many years. ATG-Fresenius S is an immunosuppressive agent used to suppress graft rejection following an organ transplantation.

In cancer therapy, final results are available of a phase I study to determine dosage, safety and tolerability of the antibody removab^® in peritoneal carcinomatosis as well as from a phase I study for the treatment of breast cancer using the antibody rexomun^®. The clinical results of the final reports will be published at the 41st ASCO (American Society of Clinical Oncology) Annual Meeting in May 2005. Based on the encouraging results Fresenius Biotech is planning a phase II study for the treatment of breast cancer and a phase II study for the treatment of gastric cancer.

Preliminary results are available for a phase I/II cell therapy study that investigated the treatment of patients with end-stage HIV infection. The results show that the therapy is well tolerated and safe. The clinical development program is planned to continue in the current year.

In 2004, Fresenius Biotech's EBIT was € -28 million (2003: € -19 million). The EBIT development was within our expectations and is a result of the increased research and development spending. For 2005, Fresenius Biotech‘s EBIT is expected to be in the range of € -35 million to € -40 million, largely due to the expanded clinical study program.

The business segments

Fresenius Medical Care
Fresenius Medical Care is the world's largest provider of products and services for patients with chronic kidney failure. As of December 31, 2004, Fresenius Medical Care treated about 124,400 patients (+4 %) in 1,610 dialysis clinics (+3 %), the number of treatments rose by 5 % to about 18.8 million.

• Strong growth in sales and earnings
   
• Excellent sales development in dialysis care in North America and in dialysis products and dialysis care in the international segment
   
• Outlook for 2005: significant growth in sales and earnings

Fresenius Medical Care achieved excellent sales growth in 2004 of 13 % to $ 6,228 million (2003: $ 5.528 million). In constant currency, sales rose 10 %. Organic sales growth was 6 %.

In North America, the company's biggest market, Fresenius Medical Care posted exceptionally good performance as sales rose 9 % to $ 4,216 million (2003: $ 3,855 million). Dialysis care sales grew 11 % to $ 3,795 million. Fresenius Medical Care performed about 12.9 million dialysis treatments in 2004, 4 % more than in the previous year. Sales of dialysis products (including sales to our own dialysis clinics) increased 1 % to $ 793 million.

Sales outside North America (the "International" segment) rose 20 % (constant currency: 11 %) to $ 2,012 million (2003: $ 1,673 million). Sales of dialysis products (including sales to our own dialysis clinics) increased 16 % to $ 1,450 million. Dialysis care sales grew 28 % to $ 706 million. In the international segment, Fresenius Medical Care operates 480 dialysis clinics. The Company performed 5.9 million dialysis treatments (+8 %).

Fresenius Medical Care significantly improved earnings in 2004. EBIT increased 13 % to $ 852 million (2003: $ 757 million), the operating margin was 13.7 %. On a comparable basis (excl. the new accounting regulation FIN 46R) the operating margin would have been 13.8 % (2003: 13.7 %). Net income increased 21 % to $ 402 million.

For the year 2005, Fresenius Medical Care expects currency-adjusted sales growth between 6 and 9 % and net income growth in the low double-digit range.

For further information please see Fresenius Medical Care's Investor News at www.fmc-ag.de.

Fresenius Kabi
Fresenius Kabi offers infusion therapies and clinical nutrition for seriously and chronically ill patients in the hospital and out-patient environment. The company is also a leading provider of transfusion technology products.

• Profitability significantly increased; EBIT margin of 11.8 % achieved in 2004
   
• Good organic growth of 5 %; continued double-digit growth in developing markets
   
• Outlook for 2005: significant growth in earnings expected

Sales at Fresenius Kabi rose 2 % to € 1,491 million in 2004 (2003: € 1,463 million). The company achieved a good organic sales increase of 5 %. Currency translation reduced sales by 1 %, divestments by 2 %. Sales in Europe were impacted by a 6 % decrease in Germany due to cost cuts and price pressure in the health care sector. Outside of Germany, Fresenius Kabi showed an excellent performance in Europe with organic growth of 6 %. Outstanding sales growth was achieved in the Asia-Pacific and Latin America regions posting organic increases of 22 % and 11 %, respectively.

In 2004, Fresenius Kabi reached new records in earnings. EBIT rose 20 % to € 176 million (2003: € 147 million). Besides the good progress made in international markets, cost optimization and efficiency increases, especially in production, had a positive effect. The EBIT margin was 11.8 %, an increase of 180 basis points over 10.0 % of the previous year.

Fresenius Kabi foresees continued momentum for 2005. Sales are expected to increase by about 10 % in constant currency including the Labesfal acquisition. The Asia-Pacific and Latin America regions are projected to continue their growth pattern. In parallel, Fresenius Kabi expects further optimize its cost base. As a consequence of both developments, the company is confident to post yet another significant earnings growth in 2005. The EBIT margin including the Labesfal acquisition is projected to increase to ≥ 13 %.
 

Fresenius ProServe

Fresenius ProServe offers services for international health care systems, including hospital management, the planning and construction of hospitals and pharmaceutical and medical-technical production plants.

• Earnings within expectations
   
• Organic sales growth of 10 % achieved
   
• Strategic reorientation and clear focus on core activities
   
• Outlook for 2005: continued improvement in earnings

Fresenius ProServe simplified its organizational structure in 2004 and focused on three core activities: hospital management in Germany (Wittgensteiner Kliniken), hospital engineering and services (VAMED) and engineering and services for the pharmaceutical industry (Pharmaplan). The Company divested its nursing home activities and closed its international hospital management activities. Efforts to improve earnings at Wittgensteiner Kliniken were continued according to plan.

Fresenius ProServe increased sales in 2004 to € 813 million (2003: € 742 million). The increase in sales was solely achieved through organic growth and resulted from the positive development of the hospital engineering and services business.

EBIT at Fresenius ProServe was € 9 million (2003: € -19 million), including one-time expenses of € 8 million before taxes (2003: € 34 million). Excluding one-time expenses, Fresenius ProServe achieved an EBIT of € 17 million (2003: € 15 million).

Order intake at the project businesses of VAMED and Pharmaplan was € 244 million in 2004 (2003: € 278 million). This decrease is mainly due to delayed closing of contracts as well as a continued investment caution in the pharmaceutical industry.

Fresenius ProServe expects continued earnings improvement in 2005. Projected EBIT will be between € 20 million and € 25 million. Organic sales growth is expected to be in the range of 5 to 8 % resulting mainly from the hospital engineering and services business.


Video Webcast
As part of the publication of our 2004 results, an analyst conference will be held on February 24, 2005 at 1:30 p.m. CET. We sincerely invite all investors to follow the live video broadcast of the conference over the Internet at www.fresenius-ag.com /Investor Relations / Presentations. Following the conference, a recording of the conference will be available as video-on-demand.


Annual report
The 2004 Annual Report will be available at the end of March 2005 on the Internet at www.fresenius-ag.com / Investor Relations / Publications.

Fresenius Kabi, a subsidiary of Fresenius AG, will further expand its position in China by increasing its 65 % stake in the Beijing Fresenius Kabi Pharmaceutical Co., Ltd. (BFP) joint venture to 100 %. Fresenius Kabi will acquire a 35 % stake currently owned by pharmaceutical company Beijing Double Crane Pharmaceutical Co., Ltd.

BFP has about 330 employees and achieved revenue of € 37.4 million in 2004. The company, which was founded in 1994, produces infusion solutions as well as intravenously administered drugs and is one of the most successful Fresenius Kabi subsidiaries in the Asia-Pacific region. Two BFP products – blood-volume substitute HAES-steril and Propofol Fresenius – count among the top seven market launches in China by foreign companies in recent years.

In addition to BFP, Fresenius Kabi has been active in China with a second joint venture, the Sino Swed Pharmaceutical Co. Ltd. (SSPC), since 1999. SSPC had 2004 revenue of about € 56 million and employs about 840 people. The company produces infusion solutions for clinical nutrition. Fresenius Kabi is the market leader in this segment in China with a 24 % market share. The SSPC plant in Wuxi in Southeast China has some of the highest quality standards for pharmaceutical production in the country.

Fresenius Kabi will also establish a holding company which will improve the coordination of the existing operations in China. This will strengthen Fresenius Kabi's Chinese activities and allow it to better react to the opportunities presented by a dynamically developing Chinese health care market. The new structure still requires the approval of Chinese authorities.

Fresenius Kabi has achieved double-digit growth in the Chinese market for several years and is the fifth-largest international pharmaceutical company in the country. In 2004, revenue in China grew to € 97 million with organic growth of 25 %.

Fresenius AG today announced that Rainer Hohmann, Member of the Management Board of Fresenius AG, will leave the company by mutual agreement effective March 31, 2005. Rainer Hohmann is responsible for the Fresenius ProServe business segment.

The Supervisory Board of Fresenius AG has unanimously appointed Andreas Gaddum (49) as new member of the Management Board responsible for the Fresenius ProServe business segment. He will join Fresenius on or before August 1, 2005. Until then Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG, will oversee the Fresenius ProServe business segment on an interim basis.

Andreas Gaddum began his career at the Haniel Group where he served in a number of senior executive positions. In 2001, he joined the management of Eurest Deutschland GmbH where he is currently responsible for the segment Sales / New Business.

"We thank Rainer Hohmann for his contributions to the company, especially during the restructuring phase of Fresenius ProServe, and wish him all the best for the future. We very much welcome Andreas Gaddum as a new colleague on the Board. In Andreas Gaddum we have found an experienced manager to take the business to the next level," commented Dr. Ulf M. Schneider, Chairman of the Management Board of Fresenius AG.

Fresenius Kabi AG, a subsidiary of Fresenius AG, today announced that it has closed the acquisition of Labesfal – Laboratório de Especialidades Farmacêuticas Almiro S.A. Labesfal achieved sales of € 56 million in 2004 and employs approximately 320 people. Fresenius Kabi signed the agreement to acquire Labesfal in January 2005.

Labesfal
Labesfal is headquartered in Campo de Besteiros in central Portugal and offers intravenously administered drugs (I.V. drugs) for the domestic market. The acquisition will significantly expand the I.V. drug portfolio of Fresenius Kabi, the European market leader in infusion and nutrition therapy.

Fresenius Kabi
Fresenius Kabi offers infusion therapies and clinical nutrition for seriously and chronically ill patients in the hospital and out-patient environment. The company is also a leading provider of transfusion technology products.