KABI PHARMACIA AND ERBAMONT TOGETHER HAVE ESTIMATED $3.6 BIL. TURNOVER; $1.3 BIL. MERGER BRINGS ADRIA’s ONCOLOGY STRENGTH TO KABI’s DIVERSE PRODUCT LINE

Kabi Pharmacia and Erbamont's approximately $3.6 bil. combined turnover (Swedish kroner 21 bil.) for 1992 will put their combined businesses among the top 10 pharmaceutical companies in Europe and the top 20 worldwide. In 1992, Kabi had sales of $2.3 bil. (SEK 3.4 bil.) and operating income of $400 mil. (SEK 2.3 bil.); Erbamont/Farmitalia had sales of $1.3 bil. (1,600 bil. Italian lire) and operating income of $100 mil. (Lit. 140 bil.). Under an agreement announced March 22, Kabi's Swedish parent Procordia will purchase 51% of stock of both Farmitalia Carlo Erba and Erbamont from the Italian parent firm Montedison-Ferruzzi for a cash payment of $400 mil. (Lit. 640 bil.). Farmitalia Carlo Erba's and Erbamont's $400 mil. (Lit. 642 bil.) in debt will also be transferred to Procordia. The agreement gives Procordia an option to purchase the balance of Erbamont and Farmitalia Carlo Erba's shares for approximately $500 mil. (Lit. 818 bil.) from 1994 to 1995. Montedison may demand that the option be exercised sooner. The transaction, including the transfer of debt and the two payments is valued to Montedison at $1.3 bil. (Lit. 2,100 bil.), assuming call or put options on the stock transaction are exercised in full. The parent firms expect the deal to be completed this spring. In addition to the estimated $1.3 bil. value of the transaction, Montedison, for approximately three years, will receive 24% of sales of Erbamont subsidiary Adria Labs' Mycobutin (rifabutin), as well as three Erbamont products currently in development, with total royalties estimated between $250 mil. and $320 mil. (Lit. 400 bil.-500 bil.). Kabi projects that within five years, annual sales of Mycobutin will reach about $130 mil. (SEK 1 bil.). Mycobutin was approved in the U.S. in late 1992 for the prevention of AIDS- related Mycobacterium avium complex (MAC). The merger adds Kabi's oncology research program and pipeline to Adria Labs' cancer focus, with products including Adriamycin and Idamycin. Kabi estimates that Adria has about 8% of the world cancer market. Although the product patent for the antineoplastic Adriamycin (doxorubicin) expired in June 1988 and its process patent expired in April 1991, a 1991 supply agreement with Cetus has helped to reduce losses to generic firms, Montedison says. The agreement was part of a settlement of a patent dispute between the two companies ("The Pink Sheet" April 22, 1991, T&G-5). At the time, Cetus estimated U.S. sales of liquid doxorubicin, which account for about 70% of the drug's sales, at $100 mil. Worldwide, Adriamycin sales in the first half of 1992 remained level after an 11% drop following the conclusion of the deal with Cetus. Kabi Pharmacia's lead cancer product, Emcyt, was relaunched in the U.S. in 1991. The firm has a number of other oncology products in clinical in the U.S., including Tauricyt (tauromustine) for colon cancer. Erbamont and Kabi will have a combined worldwide research budget of approximately $500 mil. (SEK 3 bil.), representing 14% of sales. In addition to oncology, Kabi will contribute products and product development in growth and eye disorders, eye surgery, I.V. nutrient solutions and in-vitro allergy tests. Kabi products sold in the U.S. include the antithrombin Kabikinase, Dipentum and Azulfidine for ulcerative colitis, the parenteral fat emulsion Intralipid and Healon, a viscoelastic product for cataract surgery. Worldwide, Kabi's lead product is the growth hormone Genotropin, with total sales in excess of $260 mil. (SEK 2 bil.). Together the pharmaceutical groups' major markets are Europe, accounting for about 66%, or $2.4 bil., of 1992 pro forma combined sales; the U.S., accounting for 13% in 1992 sales ($470 mil.); and Japan, with 9% of sales ($325 mil.). Italy, Germany and Sweden are the firm's largest European markets, accounting for 18%, 10% and 9% of sales, respectively. Cost savings from the merging of Erbamont with Kabi will reach approximately $130 mil. (SEK 1 bil.) annually within four years, Kabi estimates.