Addresses at Q-Med's general meeting of the shareholders

ADDRESSES AT Q-MED'S GENERAL MEETING OF THE SHAREHOLDERS The main points in the address of the President and CEO, Per Olof Wallström, at Q-Med's general meeting of the shareholders on May 10: * Account of the company's work towards establishment in USA. "RESTYLANE will be our first product in USA. The American aesthetics market is the largest in the world and furthermore it is growing at a considerable rate. The market segment that we are active in increased by 85 per cent during the previous year." * PERLANE and RESTYLANE FINE LINES approved in Canada. Main points in the address of the Vice President, Bengt Ågerup: * Account of Q-Med's technology. "Our NASHA technology constitutes a unique opportunity to quickly bring out new products in a number of different areas. We have treated over 250,000 people with NASHA and this constitutes a fantastic safety base for future applications." * "Cell therapy is a new and exciting area for Q-Med where research is being carried out in cooperation with Ixion Biotechnology in Florida. The hope is to be able to cure insulin-demanding Type 1 diabetes. Successful trials have so far been carried out in mice." At the Annual General Meeting of Q-Med AB (publ) on May 10 the addresses were given by the President and CEO, Per Olof Wallström, and Q-Med's founder and Vice President, Bengt Ågerup. In his address Per Olof Wallström gave an account of the company's development during 1999, the company's overall aim and objectives, and the objectives for each business unit, where intensive work is now ongoing within a number of different product projects. AESTHETICS - globalization Within the area of Aesthetics two facial aesthetic products, PERLANE and RESTYLANE FINE LINES, were launched in Europe in March. The products have been received even more positively than expected. On May 1 approval was also given in Canada, where the launch will be before the summer. With regard to RESTYLANE Q-Med applied for registration in Japan in May 1999 and a launch of the product is planned for the end of this year. At present a subsidiary is being set up in Japan. There are already some sales today direct to doctors. The interest from this market is very great, and it is estimated to amount to at least SEK 150 million per year. In April Bengt Ågerup received a prize for his contributions at a large aesthetics trade fair in Tokyo. Establishment in USA Q-Med will carry out clinical studies for the approval of RESTYLANE in USA. It is estimated that the registration file will be submitted in 2001 and the launch is planned for 2002. Prior to the launch, work is now ongoing to map the American market. This market constitutes at least half of the total world market for facial aesthetic products. According to the American Society for Aesthetic Plastic Surgery almost 1 million skin injections were carried out in USA during 1999 for the treatment of wrinkles and lips, an increase of 85 per cent compared to the previous year. Half of the treatments were performed with collagen and half with botulinum toxin. Per Olof Wallström also gave an account of the thoughts surrounding the strategy for establishment: "A key factor for Q-Med's continued growth is the securing of suitable channels for marketing and distribution of the NASHA products. Within the aesthetics area the main strategy is to set up subsidiaries in the major markets and to take full responsibility for sales and marketing vis-à-vis primarily dermatologists and plastic surgeons. Regarding the American market evaluation is ongoing of different alternatives for establishment, including partnership." ORTHOPEDICS - in the documentation phase The objectives for Orthopedics during 2000 are to have DUROLANE approved for sales in Europe and to submit a registration file in Japan. The safety study on which the registration file for approval in Europe is based is going according to plan and will have been completed by the summer. "33 million people in the seven largest pharmaceutical markets suffer from arthritis. This makes it an enormous problem. In terms of money the market for hyaluronic acid preparations today amounts to about SEK 5 billion and is growing rapidly. We intend to document that our product is better than those which are on the market today and have high hopes of DUROLANE for the future," said Per Olof Wallström. Furthermore, Q-Med is planning to come to an agreement with a strategic partner before the end of the year with respect to distribution and marketing of DUROLANE. URO-GYNAECOLOGY - in the starting blocks Q-Med's Urology business area has changed name to Uro-Gynaecology in order to better reflect the fact that the largest product, DEFLUX for stress urinary incontinence, is very largely aimed at women. It is intended that treatment with the product will be able to be done by the woman's own gynaecologist, instead of being limited to the hospitals' specialist departments, as is the case today. "In order to open up and increase the market it is necessary to simplify the treatment. We have a prototype ready for a new injection device and we are now applying for a patent for this device. We will test this new device clinically with DEFLUX during the year," said Per Olof Wallström. In his address Q-Med's founder and principal owner Bengt Ågerup gave an account of Q-Med's NASHA technology. He also explained Q-Med's explorative area, cell therapy, where research is being carried out in cooperation with Ixion Biotechnology, Inc. in Florida . NASHA All of Q-Med's products are based on the company's unique NASHA (Non- Animal Stabilized Hyaluronic Acid) technology. "Hyaluronic acid is a natural substance, identical in all living creatures, which is to be found principally in the skin but also, for example, in muscles, the skeleton and joint fluid. The function in the skin is together with water to create volume while the function in joints and muscles is as a lubricant and shock absorber," said Bengt Ågerup. NASHA is produced from non-animal raw material, which has two advantages compared with animal raw material. Firstly, the product achieves a high degree of purity and does not contain any viruses of animal origin that might occur. Secondly, the allergic reactions that can arise from impurities in products of animal origin are eliminated. The stabilization of HA is a precondition for the long residence time. NASHA is broken down considerably slower than naturally occurring HA, which is metabolized in the body all the time. Q-Med's NASHA technology is patented until 2015. As the same technology is used for all products this constitutes a unique opportunity to quickly bring out new products within a number of different areas. Today over 250,000 people have been treated with NASHA, and this gives Q-Med a fantastic safety base for future applications. CELL THERAPY In cooperation with an American biotechnology company, Ixion Biotechnology, Inc., Q-Med is at present evaluating the use of NASHA to give protection and a development environment for progenitor stem cells in connection with the implantation of these cells in host organisms. These stem cells are differentiated into cell islets in the laboratory and have the ability to produce insulin after implantation. The encapsulation in NASHA is intended to promote the cells' growth so that these cells can begin to control the uptake of glucose in insulin-dependent diabetics. Trials have been carried out on mice with positive results and have recently been published in the Nature Medicine journal. "Cell therapy is a very exciting area for Q-Med where we see that our NASHA gel can be used as an encapsulating medium and thereby prevent the body from reacting negatively to the cells which are encapsulated," said Bengt Ågerup. May 11, 2000, Uppsala, Sweden Q-Med AB (publ) Per Olof Wallström, President and CEO Queries should be addressed to Per Olof Wallström, President and CEO, on +46(0)18-474 90 00 or +46(0)70-974 90 70. Q-Med AB (publ), Seminariegatan 21, SE-752 28 Uppsala, Sweden. Corporate identity number 556258-6882. Tel: +46(0)18-474 90 00. Fax: +46(0)18-474 90 01. E-mail: info@q-med.com. Home page: www.q-med.com ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/05/11/20000511BIT00110/bit0001.doc http://www.bit.se/bitonline/2000/05/11/20000511BIT00110/bit0002.pdf