Nycomed Annual Report 2008 - Takeda Pharmaceuticals ...

aNycomed Annual Report 2008NycomedAnnual Report 2008Nycomed S.C.A. SICARCOMPANy PROFILE | CEO LETTER | MANAGEMENT REPORT | PRODUCTS | PIPELINE | CORPORAT

cONteNts04 Company Profile05 CEO Letter06 Management Report16 Products20 Pipeline22 Corporate Governance30 Financial Statements84 ContactsE GOVERNANCE | FINANCIAL STATEMENTS | CONTACTS

2 Nycomed Annual Report 2008Financial Highlightsand Key Figures2006 2005pro forma 2005 2) (12 months)2008 2007 2006 1) (unaudited) (8 months) (unaudited) 2004Europe 1,623.8 1,702.7 526.2 1,651.3 326.4 482.5 435.4Russia/CIS 329.9 268.4 221.9 221.8 105.7 150.7 98.8LASA-CAN 449.9 548.1 - 491.5 - - -Nycomed US (specialities) 272.3 219.4 - 202.0 - - -US Out-licensing 337.2 436.1 - 471.6 - - -International Sales/Export 261.2 240.6 98.9 211.3 60.9 89.1 81.6Contract Manufacturing/Other 73.7 82.1 22.9 144.9 14.9 25.2 28.8total net turnover 3,348.0 3,497.4 869.9 3,394.4 507.9 747.5 644.6Cost of sales 884.6 959.6 349.9 905.6 266.3 369.3 284.6Gross profit 2,463.4 2,537.8 520.1 2,488.8 241.6 378.2 360.0Operating income (EBIT) 352.0 353.8 46.0 217.2 -36.8 -16.5 52.9Net financial items -475.7 -76.5 -156.1 -361.0 -75 -88.7 -67.4Net result -77.9 235.4 -83.4 -97.8 -86.5 -81.0 5.6EBITDA 1,142.8 997.1 168.0 869.1 44.6 90.5 126.3Adjusted EBITDA 1,207.6 1,222.2 180.8 933.0 110.7 156.7 129.3Balance sheetTotal assets 7,972.3 8,390.7 9,176.5 9,176.5 2,350.7 2,350.7 1,486.9Change in working capital -111.8 24.5 -41.1 -17.1 -35.2 -58.1 -12.2Capital expenditures 4) -175.8 -200.9 -30.3 -121.3 -16.6 -20.7 -27.1Total equity 1,321.3 1,380.6 1,232.4 1,232.4 819.4 819.4 548.8cash flowOperating activities 494.7 475.8 -64.0 519.9 16.8 20.7 51.0Sale/purchase of business activities -238.0 -68.5 -4,089.3 -4,089.3 -748.3 -784.5 24.0Other investing activities -171.0 -135.7 -53.3 -130.4 -29.4 -39.9 -76.1Financing activities -65.7 -460.3 4,837.9 -114.4 807.6 827.3 -14.2Net cash flow 20.0 -188.7 631.2 275.1 46.7 23.6 -15.3ratiosGross profit margin 73.6% 74.1% 59.8% 74.9% 47.6% 50.6% 55.8%EBITDA margin 34.1% 28.5% 19.3% 25.6% 8.8% 12.1% 19.6%Adjusted EBITDA margin 36.1% 34.9% 20.8% 27.5% 21.8% 21.0% 20.1%Number of employees 11,657 11,683 3,821 12,741 3) 3,252 3,252 3,019See inside back cover for definition of key figures and financial ratios.1) 29 December 2006 the Nycomed Group acquired Altana Pharma AG.2) 9 May 2005 the Nycomed Group (Nycomed Holdings ApS) was acquired by Nycomed A/S.3) Increase in employees due to the acquisition of Altana Pharma AG in 2006.4) Includes additions for property, plant, equipment and intangibles.

Nycomed Annual Report 20083Recent Achievements>Pivotal 12-month studies in patients with symptomatic chronicobstructive pulmonary disease (COPD) met the primaryendpoints for Daxas ® .>Nycomed acquired US company Bradley Pharmaceuticals tobecome a leading speciality pharmaceutical player in dermatologyin the US market.>Collaboration with Immunomedics giving Nycomed exclusive,worldwide rights to develop, manufacture and commercialise thesubcutaneous formulation of Veltuzumab for the treatment of allnon-cancer indications.>At the end of 2008, Nycomed signed a contract with EffRx.The licensing agreement on EffRx’s drug Alendronateeffervescent gives Nycomed exclusive rights from 2009 todevelop, manufacture and commercialise the effervescentformulation of Alendronate for the treatment of osteoporosis.>Alvesco ® gained FDA approval in the US and Nycomed grantedSepracor the exclusive development, marketing andcommercialisation rights for Ciclesonide in the US.>Nycomed granted Baxter exclusive rights to market and distributeNycomed’s TachoSil ® patch for the US market.>Optimisation of European manufacturing network to improvecompetitiveness.>Joint venture with our Indian partner Zydus Cadila expanded toalso cover the production of active pharmaceutical ingredients(APIs).>Nycomed established its own marketing and sales organisation inVenezuela extending the company’s presence to all four of thelargest Latin American pharmaceutical markets.>Following a strategic decision to discontinue R&D activity inoncology, Nycomed transferred some projects to 4SC AG and itspreclinical anti-cancer programme to Bayer Schering Pharma.Total Net Turnover Adjusted ebitDa Number of employees(€ million) (€ million)3,5003,0002,5002,0001,5001,0005001,20090060030012,0009,0006,0003,0002004* 2005* 2006* 2007 2008 2004* 2005* 2006* 2007 2008 2004* 2005* 2006* 2007 2008Altana PharmaNycomed*combined proforma non-audited, figures of Altana Pharmaand Nycomed before acquisition of Altana PharmaNet turnover by region(€ million)Sales of key products(€ million)200813.4 %449.9LASA-CAN 9.9 %329.9Russia/CIS48.5 %1,623.8Europe2.2 %73.7Contract Manufacturing/Other10.1 %337.2US Out-licensing8.1 %272.3Nycomed US(specialities)7.8 %261.2International Sales/ExportPRoduct theRAPEUTIC AREA SALES 2008 SALES 2007 GROWTHPantoprazole Gastroenterology 1,314 1,685 -22.0%Calcium D 3 Osteoporosis 112 94 +17.7%Actovegin ® Neurology 103 92 +11.2%TachoSil ® Tissue management 87 64 +35.7%Alvesco ® Respiratory diseases 48 38 +25.8%Preotact ® Osteoporosis 45 18 +145.7 %Xefo ® Pain 38 31 +22.1%Matrifen ® Pain 28 18 +48.1%

4Nycomed Annual Report 2007Company Profile>Nycomed at a glanceNycomed is a privately owned, global, market-drivenpharmaceutical company with a differentiated portfolioof branded medicines in gastroenterology, respiratoryand inflammatory diseases, pain, osteoporosis and tissuemanagement. An extensive range of OTC productscompletes the portfolio.Nycomed has strong platforms in Europe and in fastgrowingmarkets such as Russia/CIS and Latin America.In-licensing is a cornerstone of the company’s growthstrategy and Nycomed actively seeks partnerships in itscore areas as well as throughout the value chain.Our VisionOur vision is to become the preferred pharmaceuticalcompany by being responsive, reliable and focusingon results.Our MissionOur mission is to bring medicines that matter topatients and healthcare providers.Company Profile | | CEO letter | | Management Report | | Key products | Pipeline | | Corporate | Governance | Financial | Statements | Contacts | |

Nycomed Annual Report 20085CEO Letter>VerysatisfyingWell positioned for 20092008 has been a very satisfying year forNycomed. Our key products continue theirabove-average growth, and Pantoprazoleperforms very well outside the United Statesand Canada. Most of our home markets alsoachieved results above expectations.Moreover, we were able to reduce our costbase further which allowed us to completethe year with favourable earnings results.Even though we see signs of the currenteconomic situation in some pharmaceuticalmarkets, this has had only a minor impacton Nycomed’s performance during the fullyear.We are rapidly moving ahead with thepreparations for the European and UnitedStates regulatory filing of Daxas ® (Roflumilast),our treatment of chronic obstructivepulmonary disease (COPD), which hasshown encouraging results in the pivotalstudies. And we have initiated the searchfor a commercialisation partner for theUnited States. By in-licensing Veltuzumaband effervescent Alendronate we havemade significant additions to our pipeline.The integration restructuring showed itsfull cost-saving effect in 2008. Togetherwith the ongoing optimisation of ourmanufacturing network, this increases ourcompetitiveness and strengthens us forthe future.For 2009, we are well prepared to managePantoprazole as its substance patent expiresin Europe – and expect it to remain ourlargest single product in the longer term.At the same time, our growth will continueto originate from our key products, fromnew product launches like Daxas ® andsustained high growth in Russia/CIS andLatin America. Furthermore, we will bestrengthening our position in Asia in thecoming years by exploiting opportunities foracquisitions or partnerships.Current world economic conditionsmake predictions difficult, but we arewell positioned for the future and remainconfident that we can deliver anothergood performance in 2009.Håkan BjörklundChief Executive Officer (CEO)

6Nycomed Annual Report 2008Management Report>Management ReportOVERALL PERFORMANCEThe twelve months of 2008 have been verysatisfactory for Nycomed. Adjusted EBITDAamounted to € 1,207.6 million which is slightlybelow 2007. Total revenue decreased by4.3% to € 3,348.0 million compared to€ 3,497.4 million in 2007. In local currencytotal net turnover decreased by 1.5%.The decrease in revenue is mainly due todecreased sales of Pantoprazole in the UnitedStates to our partner Wyeth Pharmaceuticalsas a result of the “at-risk” launch of genericPantoprazole. Revenue for 2008 is alsoimpacted by an execution payment of€ 100.9 million received from our partnerSepracor in connection with granting theexclusive development and marketing rightsfor the Ciclesonide product family in theUnited States.Revenue growth based on normalisedrevenue figures reflecting the underlying andongoing business activities amounts to 4.1%for 2008 compared to 2007. In local currency,revenue growth based on normalised revenuefigures amounts to 4.3%. Normalisation ofrevenue comprises adjustments of decreasedsales of Pantoprazole in the United States andCanada, the execution payment from theout-licensing agreement with Sepracor, theacquisition of Bradley Pharmaceuticals anddisposals of business activities and otherminor adjustments. Adjusting for the sameeffects and the disposal of the oncologypipeline, normalised adjusted EBITDA grewby 34.7% in 2008 compared to 2007.Most of our markets performed well andabove our expectations for 2008. Sales inRussia/CIS grew by 30.8% in local currency.Despite price reductions in many of ourmarkets for Pantoprazole, sales developedsatisfactorily as a result of strong volumegrowth. Excluding the United States andCanada, we experienced total volumegrowth for 2008 of approximately 15.7% forEurope and rest of the world. Sales of ourkey products also performed according to ourexpectations and developed positively, witha growth of approximately 17.2% (17.8% inlocal currency) compared to 2007. Otherproducts and local product portfolios in totalshowed a growth of approximately 1.2%(10.4% in local currency).The growth in normalised adjusted EBITDAas stated above is impacted by the favourabledevelopment in our markets, however,significant decreased research anddevelopment costs also led to an increase innormalised adjusted EBITDA. This is a resultof the change in the R&D model and thefollowing restructuring in 2007. Thedecreased research and development costscomprise personnel-related costs as well asclinical project costs. Total marketing andsales costs increased slightly in 2008compared to 2007. This is impacted bythe acquisition of Bradley Pharmaceuticals.Excluding this acquisition, marketing andsales expenses were slightly below the levelof 2007. Regionally, marketing and sales costsincreased in our emerging markets, whilemarketing and sales costs decreased in otherregions in general. Cost saving measuresfrom the 2007 restructuring prove to have asustainable positive effect on adjustedEBITDA.REGIONAL PERFORMANCEMost of our markets performed well andabove our expectations throughout 2008even though the financial crisis added someuncertainty to our business environmentprimarily related to the emerging markets. In2008 the strongest growth was seen inGreece with an increase of 42.1% over 2007due to the strong performance of the newlylaunched Preotact ® and also Pantoprazole.Russia/CIS continued its strong growthshowing an increase of 23.2% in Euro andmore than 30.0% in local currency. Also Italyand most of our Eastern European countriesincreased sales considerably in 2008. Despiteprice reductions in many of our markets forPantoprazole, sales reached our expectationsdue to strong volume growth. Excluding theUS and Canada we saw total volume growthof approximately 15.7% for Europe and restof the world. Sales of other key productsdeveloped satisfactorily in 2008 and were onor above our expectations with Preotact ® ,TachoSil ® , Calcium D 3, Alvesco ® , Xefo ® andMatrifen ® showing growth of 20.0% or more.EuropeTotal European revenues declined by 4.6%in 2008 compared to 2007. The decline isprimarily related to France, Germany, Spainand the United Kingdom due to lower pricesfor Pantoprazole and the divestiture ofcertain business areas such as imaging andsome smaller franchises in Switzerland.Excluding sales from these businesses wehad growth in Europe of approximately0.3% in 2008.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 7Nycomed´s sales and operating income derives from the following regionsEurope 1 – Denmark, Norway, Sweden,Finland, Belgium and the Baltic States.Europe 2 – Germany, France, Italy,Netherlands, Austria, Poland and SwitzerlandEurope 3 – Greece, United Kingdom,Portugal, Romania, Spain, Czech Republic,Hungary, Ireland, Croatia and SlovakiaLASA-CAN – Argentina, Mexico, Brazil,South Africa and CanadaRussia/CISInternational Sales/Export – Asia,Australia, China, India, Japan and otherexport countriesNycomed US (Specialities)US Out-licensingThis includes Wyeth Business, Sepracor andAngiox one time execution paymentsContract ManufacturingNycomed outsources its excess capacity onNycomed plants to manufacture products orcomponents for external partners.Nycomed´s segments reflect the structureof our management and sales organisation,our systems of internal financial reporting,and the predominant source of risk andreturn of the business.net turnover by region(€ million)40003,497.43,348.0Full year Full year Percentage€ million 2008 2007 Change change3000Europe 1Europe 1 367.5 366.9 0.6 0.2%Europe 2 957.2 1,013.2 -56.0 -5.5%Europe 2Europe 3 299.1 322.6 -23.5 -7.3%2000Europe 3LASA-CAN 449.9 548.1 -98.2 -17.9%Nycomed US 272.3 219.4 52.9 24.1%LASA-CANRussia/CIS 329.9 268.4 61.5 22.9%1000Nycomed USRussia/CISInternational Sales/Export 261.2 240.6 20.6 8.6%US Out-licensing 337.2 436.1 -98.9 -22.7%International Sales (Export)Contract Manufacturing/Other 73.7 82.1 -8.4 -10.2%020072008US Out-licensingContract Manufacturing3,348.0 3,497.4 -149.4 -4.3%

8Nycomed Annual Report 2008Management Report>Italy increased sales in 2008 by 12.9% eventhough prices for Pantoprazole werevoluntarily lowered by almost 40.0% in thefourth quarter of 2007. Eastern Europeancountries continue to develop satisfactorily;Greece had strong growth of more than40.0% while the Scandinavian countries hadno or low single digit growth.Europe 12008 revenues in Europe 1 increased by0.2% compared to 2007 with Norway andSweden hit by the negative currency impactand Denmark by the parallel import ofPantoprazole and generic competition. Thisregion was negatively influenced by therepatriation of the Bracco imaging businessin Belgium and by TrioBe in Norway. Excludingthese businesses growth was approximately3.6% year on year.The Baltics saw the highest sales ever inDecember, which was due to an upcomingsubstantial increase in value added tax forpharmaceuticals in January causing stockpilingby patients and wholesalers. Totalannual sales were 1.1% lower than in 2007primarily due to an early termination of thedistribution contract by Dansk Droge.Full year performance for Denmark showeda decline in sales of 0.8% from 2007 to 2008.2008 sales were hit by intensified genericcompetition on some key products and theparallel import of Pantoprazole since thesummer.Finland showed growth in sales in 2008of 5.6% compared to 2007. A smallerproduction issue was overcome in themiddle of the year and strong sales, e. g. ofCircadin ® , were achieved.Total sales for Sweden increased by 0.4% in2008 compared to 2007, while in localcurrency the increase was approximately2.0%. The increase in sales is mainly drivenby the Rx portfolio, Matrifen ® due to noimpact from the exchange decision (substitution)and a price increase on Calcium D 3. Also theOTC and generic portfolios performed well.Belgium sales declined by 2.3% from 2007to 2008. Excluding the loss of the imagingbusiness, Belgium showed growth of morethan 6.0%. We saw strong performance ofPantoprazole and Zurcale ® while Circadin ®sales were disappointing despite a stronguptake in the last quarter. The OTC productswere below expectations mainly due to thebad performance of recently introducedproducts. Delays in the launch of the lineextension and strong competition in generalhave also negatively influenced ourperformance.2008 sales in Norway were 3.6% below 2007while in local currency the decline wasapproximately 1.0%. TachoSil ® performedunder our expectations while our OTCproduct, Nycoplus ® had a very successful year.Europe 2Europe 2 had a very strong performance in2008 and delivered above expectations eventhough total revenues declined by 5.5%.Excluding the divestment of low-marginbusinesses and the imaging franchises inWestern European markets, the region showedgrowth of approximately 1.0%. Both Italyand Poland showed strong growth whilethe sales development in Germany wasflat despite a major price cut in Pantoprazolein June.From a portfolio standpoint Pantoprazolewas again the key contributor and salesexceeded our expectations and were evenslightly above an already dynamic 2007,compensated by strong growth in consumptiondespite the marked price decreasesthroughout the area. Pantoprazole continuesto be strongly challenged by the costcontainment measurements of the localhealthcare systems.Sales in Austria showed a decline of 0.2%compared to 2007. This was primarily due tothe launch of several Pantoprazole genericsin September, which were withdrawn fromthe market in November after a preliminarycourt decision. Pantoprazole remains thebest selling brand by far in the Austrianpharmaceutical market.In France the net sales 2008 decreased by8.8% compared to 2007. The decline wasaffected by the repatriation by Bracco of theimaging business. Excluding this, sales increasedby approximately 1.0%. At the end of theyear Inipomp ® , a sizeable Pantoprazole brandof approximately € 150.0 million marketsales and out-licensed so far to Sanofi, wasrepatriated. With respect to the contractwith Sanofi, upon the termination of thecontract on 31 December 2008, Sanofigranted Nycomed an exclusive, sub-licensable,royalty-bearing licence to use the trademarkInipomp ® .2008 sales in Germany declined by 14.4%compared to 2007. The overall top linedecrease is explained by the loss of theimaging franchise. Excluding this, Germanyshowed a decline of approximately 1.0%.The key driver in this development wasPantoprazole, growing in 2008 despite areference price cut of 27.0% in June 2008.The underlying strong increase in consumptionwas mainly triggered by successfully gainingpatients for Pantoprazole from otherproton-pump-inhibitor (PPI) treatments.Italy recorded strong growth of 12.9% in2008 compared to 2007. As earlier statedPantoprazole started with a 40.0% voluntaryprice cut from October 2007, which provedto be the adequate brand strategy. This ledto a significant market share increase ofPantoprazole in the PPI consumption andthereby over-compensated the price decrease.However, part of the local Pantoprazoledynamic is also due to increased parallelexports. Preotact ® also showed strong growthin 2008.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 9Sales in the Netherlands declined by14.2% in 2008. However, this was due tostrongly increased Pantoprazole parallelimports. From a local sell-out standpointthe Pantoprazole performance was andstill is robust.Poland showed strong performance in 2008and increased sales by 30.0% compared to2007. The major growth driver was Alvesco ®with significant sales but also Pantoprazoleremained at a high level despite genericcompetition.Sales in Switzerland declined by 14.0% in2008. The decrease is explained by twofactors, a 20.0% price cut in Pantoprazole inearly 2008 and the divestment of two lowmargin franchises, namely a generic oncologyand a diagnostic line. Pantoprazole sell-outperformance is still strong, loss of exclusivitywill occur in June 2010 only.Europe 3Europe 3 showed a decline in revenues in2008 compared to 2007 of 7.3%. Strongfull year performers were Greece, the CzechRepublic and Romania while Spain, the UKand Portugal saw a decline in revenues.Greece showed an increase in sales of42.1% in 2008 over 2007. Pantoprazoleperformed very well, and Preotact ® showedstrong growth with an increase in sales ofapproximately 75.0% over 2007. Other newlylaunched products are showing good growth.For Romania sales increased by 28.1% in2008. Actovegin ® in particular deliveredabove expectations, Xefo ® tripled sales in2008 but also Controloc ® increasedconsiderably despite the loss of exclusivity.Sales in 2008 in Croatia increased by11.6% compared to 2007 even thoughwe saw intensified generic competitionon Pantoprazole and hospital savingsinitiatives that reduced our hospital sales.We saw an increase in sales in 2008 of24.0% compared to 2007 in the CzechRepublic. The OTC portfolio in general andCalcichew ® in particular had a strong year,while the Bracco imaging business sufferedfrom price erosion, not fully offset byvolume increase.Sales increased by 1.2% in 2008 in Slovakia.During the year sales were impacted bywholesaler IT problems, stock reductionsand many of our products were hit by pricecuts.In Ireland sales increased by 7.7% in 2008compared to 2007. Protium ® deliveredaccording to expectations even though itwas negatively influenced by parallel imports.2008 sales in the United Kingdom declinedby 42.4% compared to 2007. This is primarilydue to the parallel import of Protium ® ontop of a gradual decline due to in-classgeneric substitution driven by payers.In 2008 sales in Portugal declined by 18.3%compared to 2007. The main reasons beingour decision not to launch Matrifen ® , thedelay of the TachoSil ® launch and stock-outsituations on Faktu. Pantoprazole reached ourexpectations.In Spain 2008 sales declined by 14.1% comparedto 2007 primarily due to a 30.0% price cuton Pantoprazole in February 2008. Preotact ®2008 sales showed strong growth and almostdoubled compared to 2007 while TachoSil ®showed growth of almost 60.0%. TachoSil ®sales suffered from hospital cost containmentmeasures during the year.In Hungary sales declined by 14.3% in 2008primarily due to a price cut on Pantoprazoleoral form of 44.0% which squeezed thegeneric Pantoprazole penetration. Ebrantil ®showed strong performance while Alvesco ®sales were slightly below our expectations.Latin America, South Africaand CanadaThe region showed a decline in revenues of17.9% in 2008 compared to 2007 primarilydue to the generic impact on Pantoprazolein Canada and a negative development inexchange rates. Adjusting for the genericimpact of Pantoprazole in Canada and thenegative exchange deviation the regionshowed growth of approximately 4.0%.2008 sales in Canada declined by 42.5%primarily due to the generic impact ofPantoprazole in April 2008. Furthermore,Alvesco ® , Omnaris ® and Resultz ® showedsales below our expectations.Sales in South Africa declined by 12.2% in2008 compared to 2007. This is primarilydue to negative exchange rate movements.Adjusting for this South Africa showed agrowth of approximately 8.0%. Xefo ® andthe OTC business performed well.Sales in Brazil declined by 0.3% in 2008compared to 2007. Adjusting for the negativecurrency impact, Brazil showed a growth ofapproximately 1.0%. Sales of Neosaldina ® ,Pantoprazole oral, Dramin ® and Kaloba ® arestill driving sales although Kaloba ® is behindthe previous year due to seasonality whileour OTC franchise suffered in the latter partof the year.

10 Nycomed Annual Report 2008Management Report>Total sales in Mexico declined by 1.3% in 2008compared to 2007 and recovered strongly inthe second half of the year, after a weakstart in 2008. We had very strong Decembersales. Currency developed negatively andexcluding this negative impact Mexicoshowed an increase in sales of approximately7.0% in 2008.Sales in Argentina increased by 10.9% in 2008compared to 2007 with strong performancein our key products. The financial crisis hitArgentina in the third quarter increasing theinterest rate to approximately 35.0% forcingthe wholesalers to reduce inventories. Inlocal currency sales increased approximately20.0% in 2008.Russia/CISTotal revenues in Russia/CIS increased by22.9% in 2008 compared to 2007. However,adjusting for the negative exchange rateimpact the increase reached more than 30.0%.Sales developed according to expectations inall countries except for Georgia while Asia,Belorussia, Russia and Ukraine showed goodgrowth. Russia constitutes approximately70.0% of total sales in this region.Actovegin ® continues to be the biggest productin Russia/CIS and we have seen strong growthof Concor ® , Glucophage ® , Cardiomagnyl ® ,Warfarin, Xymelin TM , Ceraxon ® and Curosurf ® .The financial crisis hit Russia/CIS and theextension of payment terms with thedistributors is an ongoing discussion for allsuppliers in the region. The situation inUkraine is difficult and the pharmaceuticalbusiness, like other business areas, almoststopped in December.International Sales/Export(Asia, Australia, China, Japan and OtherExport Countries)Total revenues of international sales/exportincreased by 8.6% in 2008 compared to2007. All regions contributed to the growthled by Asia and China.Despite the turbulence in the market inmid-2008 Australia showed an increase insales of 2.4% in 2008 compared to 2007.The increase was primarily led by Somac ® ,which increased by approximately 6.0% overlast year, increasing market share to morethan 20.0%, and also by Alvesco ® .Total sales to China in 2008 increased by51.0% (more than 50.0% in local currency)compared to 2007; primarily led by the strongperformance of Pantoprazole both IV andtablets, Actovegin ® and Calcium D 3.Asia showed an increase in sales ofapproximately 9.0% in 2008 compared to2007 primarily driven by the strongperformance of South Korea and Malaysia.Key products TachoSil ® , Alvesco ® andZycomb ® continue to deliver according to plan.The Middle East/Africa increased sales in2008 by approximately 17.0% over 2007despite the delay in deliveries, thepostponement of import licences and newfinancial restrictions in Iran and Pakistan.Market sales continue to grow in line withour targets. Pantoprazole and Xefo ®continued their strong performance.2008 sales of our exports to EU/otherexport countries increased approximately7.0% over 2007 with Pantoprazole, TachoSil ®and Xefo ® as the main drivers. Turkeycontinued to show strong growth.Sales in Japan increased approximately1.0% in 2008 compared to 2007.Nycomed USRevenues of Nycomed US Inc. increased by24.1% in 2008 compared to 2007. In localcurrency the increase was almost 40.0%primarily as a result of the acquisition ofBradley Pharmaceuticals in the beginningof the year.Adjusting for Bradley Pharmaceuticals,revenue shows a loss of 6.8% (4.3% in localcurrency).Fougera continues to experience destockingin the wholesale distribution and retailchannels due to the economic conditions inthe United States. PharmaDerm weekly andmonthly TRx data continue to showincreases in promoted products, the salesshortfall is mainly attributable to the destockingat the wholesale and retail levels.US Out-licensingUS out-licensing sales decreased by 22.7%or € 98.9 million with respect to last year.Sales of Protonix ® (Pantoprazole) wereadversely affected by the “at-risk” launch ofgeneric Pantoprazole tablets in the UnitedStates by Teva Pharmaceuticals USA, Inc. on21 December 2007, and the subsequent“at-risk” launch of Sun PharmaceuticalIndustries’ generic Pantoprazole tablets.On 29 January 2008, Nycomed and itslicense holder Wyeth announced the USlaunch of their own generic version ofProtonix ® tablets. Nycomed and Wyethremain convinced of the validity andenforceability of their patent and willcontinue to vigorously pursue litigation.Total revenues from the sale of Protonix ® inthe United States declined by 53.2% in 2008compared to 2007.Contract ManufacturingSales from contract manufacturing decreasedby 10.2% in 2008 compared to 2007. Fullyear 2007 sales were extraordinarilyimpacted by non-recurring fees and thedisposal of inventory in connection with thetermination of the contract with Bracco.Adjusting for this we saw growth in salesin 2008 of 19.6%.Company Profile | CEO letter | Management Report | Key products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200811Income statement financials01.01.2008 01.01.200731.12.2008 31.12.2007 PercentageKEY FIGURES € million € million changeNet sales 3,191.8 3,450.3 -7.5%Royalties/other income 1) 156.2 47.1 231.6%Net turnover 3,348.0 3,497.4 -4.3%Cost of Sales -880.9 -906.6 -2.8%Amortisation of fair value adjustments on inventories from acquisitions 2) -3.7 -53.0 -93.0%Total cost of sales -884.6 -959.6 -7.8%gross Profit 2,463.4 2,537.8 -2.9%Sales and Marketing expenses -916.2 -934.6 -2.0%thereof disposal of activities and other non-recurring items 22.0 -4.6 -578.3%Amortisation of fair value adjustments on patents and rights from acquisitions 3) -646.0 -531.8 21.5%total sales and marketing expenses -1,562.2 -1,466.4 6.5%Research and Development expenses -224.7 -284.5 -21.0%Administration expenses -257.2 -259.1 -0.7%Integration/Restructuring costs -67.3 -174.0 -61.3%Operating Income 352.0 353.8 -0.5%Gross Profit Margin 2) 73.6% 74.1% -0.7%EBITDA 4) 1,142.8 997.1 14.6%EBITDA margin 34.1% 28.5% 19.7%Adjusted EBITDA 4) 1,207.6 1,222.2 -1.2%Adjusted EBITDA margin 36.1% 34.9% 3.2%1) Royalties are not disclosed separately from Other Income because the amount is not material to Nycomed.2) Cost of sales for December YTD 2007 includes € 53.0 million write-off of inventory step-up in connection with the purchase price allocation related to the acquisition of former Altana Pharma AG. The gross profitmargin stated above has been adjusted for this non-cash and non-recurring write-off of inventory step-up.3) Amortisation for 2007 is impacted by the application of purchase price allocation in connection with the acquisition of Altana Pharma AG as a result of the fair value adjustments to the values of currently marketedproducts and development projects. Amortisation for December 2008 YTD includes € 56,6 million as an extraordinary amount for the termination of the Venticute project.4) EBITDA means net income plus net financial items, income taxes, depreciation of tangible assets and amortisation of intangible assets. Adjusted EBITDA includes certain unusual or non-recurring items. EBITDA andadjusted EBITDA are not measurements of performance under IFRS but are key measures used in order to have a more comprehensive analysis of Nycomed´s operating performance and ongoing business and ability toservice our debt.NET TURNOVERTotal net turnover decreased by € 149.4million or 4.3% to € 3,348.0 million in 2008from € 3,497.4 million in 2007. In localcurrency total net turnover decreased by 1.5%.The main reason for the decline in netturnover is decreased sales of Pantoprazolein the United States to our partner WyethPharmaceuticals as a result of the “at-risk”launch of generic Pantoprazole. This is partlyoff-set by an execution payment of € 100.9million received from our partner Sepracorin connection with granting the exclusivedevelopment and marketing rights for theCiclesonide product family in the UnitedStates. As stated previously in the OverallPerformance section, turnover growth basedon normalised turnover figures reflecting theunderlying and ongoing business activitiesamounts to 4.1% for 2008 compared to2007. In local currency turnover growthbased on normalised turnover figuresamounts to 4.3%.Please refer to the section on page 6for more details on regional revenueperformance.COST OF SALESCost of Sales for 2008 decreased by€ 25.7 million to € 880.9 million, a decreaseof 2.8%. This excludes the amortisation of fairvalue adjustments on inventories from theacquisition of Altana Pharma of € 53.0 millionin 2007.GROSS PROFITThe gross profit for 2008, excluding theimpact of the write-off of inventorystep-up, decreased by € 127.3 million, or4.8% to € 2,463.4 million. The total grossprofit margin decreased from 74.1% in 2007to 73.6% in 2008. The decrease in grossprofit and gross profit margin is primarilydue to the decline in sales of Pantoprazolein the United States partly off-set by afavourable product mix in 2008.SALES AND MARKETING EXPENSESSales and marketing expenses excludingamortisation of fair value adjustmentsdecreased by € 18.4 million, or 2.0%, from€ 934.6 million in 2007 to € 916.2 millionin 2008.

12Nycomed Annual Report 2008Management Report>Sales and marketing expenses are influencedby the disposal of activities and other nonrecurringitems. In 2008, sales and marketingexpenses are positively impacted by22.0 million income mainly relating to thedisposal of the oncology business. Excludingthis effect, the sales and marketing expensesdeviation with respect to last year is € 8.2million or 0.9%. Sales and marketingexpenses were impacted by the acquisition ofBradley Pharmaceuticals, entailing highersales and marketing expenses in the UnitedStates compared to 2007. Excluding thisacquisition, marketing and sales expenseswere slightly below the level of 2007.Regionally, marketing and sales costs increasedin our emerging markets, Latin Americaand Russia/CIS, whereas marketing andsales expenses decreased in Europe andin the central marketing functions.In amortisation of fair value adjustmentson patents and rights from acquisitionsNycomed recognised an impairment loss of€ 56.6 million for the development projectin progress of Venticute, due to negativeresults for clinical trials classified.RESEARCH AND DEVELOPMENTEXPENSESTotal research and development expensesdecreased by € 59.8 million, 21.0%,compared to 2007, from € 284.5 million in2007 to € 224.7 million in 2008. This is aresult of the change in the R&D model andthe following restructuring in 2007. Thedecreased research and development costsare comprised of personnel-related costs aswell as decreased project costs for clinicaldevelopment programmes. The decline inproject costs for clinical development wasprimarily related to Ciclesonide as a result ofthe transfer to Sepracor and the terminationof the Venticute project. Capitalisation ofdevelopment costs in 2008, not impactingthe income statement, mainly comprises thecapitalisation of the Daxas ® developmentcost of € 29.5 million and a milestonepayment of € 25.6 million in connection withthe in-licensing of Veltuzumab from ourpartner Immunomedics. In addition, otherdevelop ment costs for Instanyl ® , Preotact ®and Optesia ® and the development of thegenerics portfolio in the United States werecapitalised.ADMINISTRATION ExPENSESTotal administration expenses were slightlybelow the expenses in 2007, a decrease of0.7%. In most of our markets administrationexpenses were at the same level as in 2007or slightly below and in the central functionscomprised by Central IT, Human Resources,Corporate Finance, Corporate Communication,Legal, Insurances and other central serviceareas the costs decreased slightly comparedto 2007 in total.OPERATING INCOMEOperating income for 2008 amounted to€ 352.0 million compared to € 353.8 millionin 2007.NET FINANCIAL ITEMSTotal net financial items for 2008 amountedto an expense of € 475.7 million compared toan expense of € 76.5 million in 2007, anincrease of € 399.2 million. The 2008 netfinancial items comprised interest incomeand other financial income of € 23.3 million(€ 22.3 million in 2007), third party interestexpenses of € 348.9 million, (€ 395.1 millionin 2007) net loss from derivatives of€ 117.1 million (net gain of € 17.0 million in2007). The 2008 net loss from derivativesincluded a € 20.9 million gain from the buybackof own debt. Furthermore total netfinancial items for 2008 comprised anunrealised foreign exchange loss of € 247.0million (after a gain of € 305.8 million in 2007),which related to the revaluation of US Dollardenominated debt. The currency revaluationexposure of the US Dollar debt was partiallyfixed by currency swaps. In 2008 Nycomedentered into cross currency swaps for anamount of € 1,500.0 million at an averageUSD/€ exchange rate of 1,5208. Due to amajor amount of unrealised gain, it has beendecided to restrike the swaps at an averageof 1,28275 generating a gain of € 227.2 million.Finally net financial items also comprised theamortisation of financing fees of € 16.1 million(€ 25.8 million in 2007) and other financialexpenses of € 5.7 million (€ 5.6 million in 2007).TAX EXPENSEIncome tax benefit for the year was€ 45.7 million in 2008 compared to anincome tax expense of € 41.9 million for2007. The increase in income tax benefitof € 87.6 million was mainly due to adecrease in income before tax which wentfrom an income of € 277.3 million in 2007 toa loss of € 123.6 million in 2008. The netincome tax benefit for 2008 was effectedby a tax income of € 5.8 million relating tothe change in tax rates. The comparablenumber for 2007 was a tax income of€ 134.5 million, which mainly related to areduction in deferred tax on the step-upvalue of intangible fixed assets due to adecrease in the tax rate. In addition the netincome tax benefit for 2008 was effectedby tax income of € 9.3 million relating toprior year adjustments. The comparablenumber for 2008 was a tax expense of€ 31.3 million, which mainly related to areversal of deferred tax assets concerning taxloss carry forwards in Denmark. Finally theincrease in tax benefit was effected by the neteffect of differences in local tax rates, thenon-deductible loss on the sale of shares,withholding tax, non-deductible expensesand other permanent differences.NET ResultNet result for 2008 amounted to € -77.9million compared to € 235.4 million in 2007.LIQUIDITYCash flow from operating activities showedan inflow of € 494.7 million during 2008compared to an inflow of € 475.8 million in2007. The increase in cash flow fromoperating activities is primarily related tolower interest payments on debt and significantlower income tax payments. The impactfrom these areas more than off-set thenegative cash flow impact from workingcapital comprising trade working capital(inventories, trade receivables and tradepayables) and other current assets andother current liabilities.Cash flow from investing activities showedan outflow of € 409.1 million mainly derivedfrom the acquisition of Bradley Pharmaceuticals,which contributed € 232.0 million in total. Thenet outflow related to tangible and intangibleassets was equivalent to € 171.0 million.Purchases of intangible assets, amounting to€ 119.5 million mainly refer to the followingprojects: Daxas ® (€ 29.5 million) andImmunomedics (€ 25.6 million).Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 13Purchases of tangible assets amount to€ 56.3 million. The negative impact from theoutflow for the purchase of fixed assets ispartially offset by the disposal of tangiblesand intangibles for about € 4.8 million.Cash flow from financing activities showedan outflow of € 65.7 million. An amount of€ 248.3 million relates to the payment ofinstalments on senior debt facilities at theend of June and December amounting to€ 185.8 million in total and the payment ofa cash sweep of € 62.5 million at the end ofMarch 2008. In addition, the cash flow fromfinancing activities is impacted by € 33.9million as part of the acquisition of owndebt during the month of December 2008.The re-strike of the cross currency swapsgenerated an inflow of € 227.2 million.CAPITAL RESOURCESNycomed expects to generate significantcash flow to support the strategy andservicing of debt in 2009 as well.As of the end of December 2008, Nycomedhad a cash position of € 496.7 millioncompared to a cash position of € 484.2 millionat the end of 2007.As of the end of December 2008, Nycomedhad a total senior debt of € 4,576.8 million(excluding the local debt of € 6.8 millionand the effect of the outstanding financingfees of € 70.4 million), compared to€ 4,751.4 million at the end of 2007(excluding the local debt of € 20.5 millionand the effect of the outstanding financingfees of € 86.8 million).Nycomed has committed facilities of€ 450.0 million under the in-licensing/restructuring facility, of which € 125.0 millionhave been drawn. In addition, Nycomedhas a revolving facility of € 250.0 million,which remains un-drawn.Subsequent EventsAcquisition of remaining 50% ofNycomed Madaus Pty, LtdOn 18 December 2008, Nycomed signedthe contract for the acquisition of theremaining 50.0% of the shares in NycomedMadaus Pty, Ltd, a company engaged in thecommercialisation of pharmaceuticalproducts in the territory of South Africa,Swaziland, Lesotho, Namibia, Botswana andIndian Ocean Islands and other countries.Nycomed already owns 50.0% of thecompany’s shares. The agreement is subjectto the approval of the competitionauthorities of the Republic of South Africawhich needs to approve the acquisitionby the close of the transaction before1 June 2009. Further information is disclosedin note 1 “Business Combination”.Effervescent Alendronate in-licensingagreement with EffRx strengthensosteoporosis portfolioNycomed and the US based EffRx signed alicensing agreement on EffRx’ drug EX101(effervescent Alendronate) for thetreatment of osteoporosis. Under theagreement, Nycomed will receive theexclusive rights to develop, manufacture andcommercialise the effervescent formulationof Alendronate for the treatment ofosteoporosis in a large number of countriesworldwide. EX101 presents a significantenhancement to Nycomed’s osteoporosisportfolio.Expanded indication for Nycomed’sTachoSil ®On 18 February 2009, Nycomed receivedan expanded indication for TachoSil ® , itsinnovative surgical patch, from the EuropeanMedicines Agency (EMEA). TachoSil ® wasapproved for haemostasis (control ofbleeding) in surgery. With the newexpanded indication, it becomes the firstand only dual action patch approved forhaemostasis, tissue sealing as well as forsuture support in vascular surgery.Positive CHMP opinion for OTCpresentation of PantoprazoleOn February 19, 2009, Nycomed’sPANTOZOL Control ® (Pantoprazole 20mg)received a positive opinion from theEuropean Medicines Agency’s (EMEA)Committee for Medicinal Products forHuman Use (CHMP), recommending thegranting of a marketing authorisation forPANTOZOL Control ® . PANTOZOL Control ®is intended for short-term treatment ofreflux symptoms (e.g. heartburn, acidregurgitation) in adults as a medicalproduct not subject to medical prescription.Interest rate risk hedge for 2009During January and February 2009 Nycomedentered into new interest rate swaps with aduration of eighteen months starting from31 March 2009. The recent interest rateswap agreements cover approximately 65.0%of Nycomed’s total interest rate risk.Outlook for 2009The total development in net turnover from2008 to 2009 will be dependent on thesituation in the US market in connectionwith the launch of generic Pantoprazoleand the expiry of the substance patent forPantoprazole in certain European countries.As in other industries, the current economicsituation is expected to influence certainmarkets.Based on current market conditions, and thecurrent development in the currency market,we feel very confident that we will be ableto fulfil our obligations towards our loandocumentation and covenants in the future.All these statements are based on currentplans, estimates and projections. By theirnature, the above-mentioned forwardlookingstatements involve inherent risksand uncertainties, both general and specific.Nycomed states that different factors maycause actual results to significantly differfrom those contained in the abovementionedforward-looking statements.

14 Nycomed Annual Report 2008Management Statement>Management StatementToday we approved the Annual Report of Nycomed S.C.A. SICARfor the period 1 January 2008 – 31 December 2008.In our opinion, the Annual Report 2008gives a true and fair view of the Group’sfinancial position, cash flows and resultsof operations.The Annual Report 2008 has been preparedin accordance with International FinancialReporting Standards (IFRS) as adopted bythe EU. We consider that the accountingpolicies used to compile the Annual Report2008 are appropriate.We recommend that the Annual Report2008 is approved at the Annual GeneralMeeting.Luxembourg, 27 February 2009Approved by the Board of Directors of the General Partner, Nycomed S.A.Toni Weitzberg, ChairmanKristoffer MelinderThompson DeanHåkan BjörklundCarl-Gustaf JohanssonColin TaylorNewton AguiarCompany Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 15Independent Auditor’s ReportTo the management of Nycomed S.C.A. SICAR Sociétéen Commandite par Actions LuxembourgREPORT ON THE CONSOLIDATEDFINANCIAL STATEMENTSFollowing our appointment by theManagement, we have audited theaccompanying consolidated financialstatements of Nycomed S.C.A. SICARwhich comprise the consolidated balancesheet as at 31 December 2008, and theconsolidated income statement,consolidated statement of changes inequity and the consolidated cash flowstatement for the year then ended anda summary of significant accountingpolicies and other explanatory notes.Management’s responsibility for theconsolidated financial statementsThe Management is responsible for thepreparation and fair presentation of theseconsolidated financial statements inaccordance with International FinancialReporting Standards (IFRS) as adopted bythe European Union. This responsibilityincludes: designing, implementing andmaintaining internal control relevant tothe preparation and fair presentation ofconsolidated financial statements that arefree from material misstatement, whetherdue to fraud or error; selecting and applyingappropriate accounting policies; and makingaccounting estimates that are reasonablein the circumstances.Responsibility of the“réviseur d’entreprises”Our responsibility is to express an opinionon these consolidated financial statementsbased on our audit. We conducted ouraudit in accordance with InternationalStandards on Auditing as adopted by the“Institut des Réviseurs d’Entreprises”.Those standards require that we complywith ethical requirements and plan andperform the audit to obtain reasonableassurance whether the consolidated financialstatements are free from materialmisstatement.An audit involves performing procedures toobtain audit evidence about the amountsand disclosures in the consolidated financialstatements. The procedures selected dependon the judgement of the “réviseurd’entreprises”, including the assessment ofthe risks of material misstatement of theconsolidated financial statements, whetherdue to fraud or error. In making those riskassessments, the “réviseur d’entreprises”considers internal control relevant to theentity’s preparation and fair presentation ofthe consolidated financial statements inorder to design audit procedures that areappropriate in the circumstances, but not forthe purpose of expressing an opinion on theeffectiveness of the entity’s internal control.An audit also includes evaluating theappropriateness of accounting policiesused and the reasonableness of accountingestimates made by the Management, aswell as evaluating the overall presentationof the consolidated financial statements.We believe that the audit evidence wehave obtained is sufficient and appropriateto provide a basis for our audit opinion.OpinionIn our opinion, the consolidated financialstatements give a true and fair view of thefinancial position of Nycomed S.C.A. SICARas of 31 December 2008, and of its financialperformance and its cash flows for the yearthen ended in accordance with InternationalFinancial Reporting Standards (IFRS) asadopted by the European Union.Report on other legal andregulatory requirementsThe consolidated management report,which is the responsibility of theManagement, is consistent with theconsolidated financial statements.Luxembourg, 27 February 2009ERNST & YOUNGSociété AnonymeRéviseur d’entreprisesOlivier Jordant

16 Nycomed Annual Report 2008Products>A differentiated portfolioof branded medicinesA comprehensive range of productsdesigned to meet specific needs.> Focus on gastroenterology, respiratoryand inflammatory diseases, pain,osteoporosis and tissue management> Extensive range of OTC products> New products coming both fromexternal resources and own research> Global products as growth drivers> Strong local brandsNycomed provides branded medicinesfor hospitals, specialists and generalpractitioners, as well as over-the-counter(OTC) medicines. Our key areas of activityare gastroenterology, respiratory andinflammatory diseases, pain, osteoporosisand tissue management. In all theseareas we aim to develop and marketproducts with medical utility.We have strong brands globally, locallyand regionally, opening up all sorts ofopportunities. Our international portfoliopromises rapid development through organicgrowth, life-cycle initiatives and in-licensing.Impressive regional portfolios continue toshow strong growth and include prescriptionproducts like Actovegin ® in Russia/CISand OTC products such as Neosaldina ®in Brazil.GastrointestinalNycomed’s gastrointestinal offer is led byPantoprazole, the company’s most successfulmedicine that, since its launch in 1994,has been used to treat over 750 millionpatients. It is indicated for the treatment ofacid-related gastrointestinal disorders and isalso used in combination with antibiotics totreat Helicobacter pylori, the cause of mostgastric and duodenal ulcers. In addition tothe prescribed version, Nycomed launchedan OTC presentation of Pantoprazole inAustralia in 2008. A European launch isplanned for 2009. The portfolio in this areais strengthened by products like Riopan ®(Magaldrate) for heartburn and acid-inducedgastrointestinal problems. It is availableover the counter in a number of countries,as are well established OTC liver remedieslike Hepatalgina ® /Eparema ® .Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 17Respiratory diseasesWe are augmenting our establishedrespiratory portfolio with new treatmentoptions for rapid growth areas like hayfever and asthma. And with the scheduledlaunch of Daxas ® in 2010 (see Pipeline),we will bring a new approach for treatingchronic obstructive pulmonarydisease (COPD).Bronchial asthma is a growing indicationwhich already counts more than 300 millionsufferers around the world. Alvesco ®(Ciclesonide), an inhaled corticosteroid hasa novel mechanism of action which providesgood tolerability. Similarly, Omnaris ® nasalspray – also based on Ciclesonide – treatsseasonal and perennial allergic rhinitis(hay fever).Another strong Nycomed brand in thistherapeutic area is the OTC nasaldecongestant Zymelin ® (Xylometazoline)that is widely available throughout Easternand Northern Europe.PainNycomed’s pain portfolio has a solid baseof existing products, which is to be furtherenhanced by the introduction of newproducts like Instanyl ® and Optesia ®(see Pipeline). It addresses a comprehensiverange of patient needs, from everydayaches and pains, through to chronic andsevere pain capable of destroying thepatient’s quality of life.Foremost for the category of aches andpains is Neosaldina ® , Brazil’s preferredOTC analgesic. In the Nordic region ourIbuprofen line goes by the well knownbrand of Ibumetin ® . For severe, chronicpain, Matrifen ® transdermal fentanylpatches give cancer patients a convenientoption that has been shown to inducefewer side effects compared to morphinetablets and other oral formulations ofopioid analgesics.In a further category of pain relief is Xefo ® ,a non-steroidal anti-inflammatory drug(NSAID) that comes in a variety offormulations to treat mild to severe painin conditions like rheumatic indicationswith inflammation. Xefo ® Rapid is a quickrelease version that has been specificallydesigned to deal with acute pain.

18 Nycomed Annual Report 2008Products>OsteoporosisOsteoporosis places a significant burden onboth the individual sufferer and society as awhole. Current under-diagnosis, combinedwith a persistent demand for improvedquality of life from an aging population, canonly increase the need for effective interventions.An innovative biotech approach toosteoporosis treatment, Preotact ® rebuildsbone and reduces the risk of fractures.With Preotact ® , we further enhance ourosteoporosis portfolio and complement ourCalcium D 3range. Preotact ® is prescribedfor post-menopausal women at high riskof fractures. Clinical studies show that itstimulates the growth of new bone, therebyreducing fractures. It is the only product inthis category that does not need permanentcold storage, so that compliance is assured,even when patients are away from home.For the prevention and treatment of calciumand vitamin D deficiencies the Calcium D 3range is used as an adjunct to specificosteoporosis treatment. The Calcium D 3portfolio comprises a growing variety ofstrengths, flavours and combinations thatare available OTC and on prescription. InEurope, Nycomed is market leader withCalcichew ® D 3. Other Nycomed tradenames for Calcium D 3products includeCalcimagon ® , Orocal ® and Calcigran ® .In January 2009, Nycomed receivedexclusive rights from EffRx to develop,manufacture and commercialise in a largenumber of countries worldwide the firsteffervescent formulation of Alendronatefor the treatment of osteoporosis.Alendronate effervescent is a significantaddition to Nycomed’s osteoporosisportfolio.Tissue managementThe key product in Nycomed´s tissuemanagement portfolio, TachoSil ® , is aready-to-use surgical patch developed toassist surgeons to achieve fast and reliablebleeding and sealing control. TachoSil ® isa collagen patch coated with the humancoagulation factors fibrinogen and thrombinand is indicated for supportive treatmentin surgery to improve haemostasis andtissue sealing as well as for suture supportin vascular surgery. When moistened,the coagulation factors are activated,gluing the collagen patch to the tissueand effectively controlling bleeding aswell as air and body fluid leaks.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 19OTC (over-the-counter)Nycomed is the world’s 15 th largest providerof over-the-counter (OTC) medicines.Our OTC business is well positioned tooutperform the big OTC players. We alreadydo in several emerging markets. 40% of ourOTC sales currently come from the two highgrowth markets of CIS and Brazil; and ourOTC sales in emerging markets are growingfour times faster than those of developedmarkets.One of the top drivers is Calcichew ® D 3,which is already an outstanding performerin the calcium supplement market. Nycomedalso provides a range of OTC products inthe areas of cold relief, gastrointestinal relief,vitamins/minerals supplements, analgesicsand allergy medications. These productsare either owned by us or in-licensed.The global OTC business unit coordinatesNycomed’s OTC strategy. Key elementsin the global programme are branding atconsumer level and a targeted customerapproach, taking into account the specificneeds of pharmacists.OTC BRAND LEADERSCalcium D 3Global (Calcichew ® D 3,Calcimagon ® )Zymelin ® Europe and CISRiopan ®Europe andLatin AmericaSanostol ® Europe andLatin AmericaNeosaldina ® BrazilHepatalgina ® / Argentina/BrazilEparema ®Ibumetin ® EuropePantoprazole OTC Global (PantozolControl ® , Somac ® )PRESCRIPTION MEDICINESActovegin ®Alvesco ®Calcichew ® D 3Circadin ®Ebrantil ®Matrifen ®Omnaris ®PantoprazolePreotact ®TachoSil ®Xefo ®Central and peripheralblood flow disturbancesAsthmaOsteoporosisInsomniaArterial hypertensionSevere chronic cancer painAllergic rhinitisAcid-relatedgastrointestinal diseasesOsteoporosisGeneral tissue sealingChronic painPantoprazole is marketed under several brands e.g.Controloc ® , Pantoloc ® , Pantozol ® , Protonix ® , Zurcal ® .

20 Nycomed Annual Report 2008Pipeline>Together for medicinesthat matterNycomed’s innovative R&D partnership modelprovides a flexible and scalable way of working.> New R&D model is based on partnerships- New ideas from biotech,academia and pharma> Streamlined in-licensing process supportsefficient evaluation and negotiation- Co-development across alldevelopment stages> Focus on medical utility- Differentiated products thataddress unmet needs> What patients, physicians andpayers valueNycomed’s clinical pipeline is filled withprojects from our own research as wellas in-licensed co-development projects.Our principal objective is to focus ourefforts where we can ultimately make thebiggest difference in terms of added valuefor patients, physicians and payers bycovering unmet medical needs.Working across a broad range of indicationareas, we are able to combine focusedin-house research and development effortswith in-licensed projects that both accelerateand add value to our development of newproducts. While our in-house expertise isstrongest in the areas of gastroenterology,respiratory and inflammatory diseases andpain, we are open to partnerships beyondthese areas.We plan for the majority of R&D projectsto originate outside the company. Newprojects are welcome from all sources, includingbiotech, pharmaceutical companiesand academia.Our flexible set-up means that we canwork effectively with suitable partners atevery stage of development and we arefully equipped to add value to our partners’projects. With 1,100 researchers we providefull R&D capabilities from early stagedevelopment right through to life-cyclemanagement. Our commercial operationshave extensive experience in both generalpractitioner and specialist markets. We alsohave recognised strength in navigating theEuropean and US regulatory system.Nycomed’s R&D is organised to meetspecific needs for partnering projects andthe way we are structured ensures thatexternal projects have the same, or evenhigher priority. We concentrate on our corecompetencies and when applicable we useexternal support for specialist activities likeclinical research. That way, we can quicklyramp up resources as required to processprojects. This scalable structure means thatwe are not limited to specific indications. Ifwe come across a new medicine or therapywhich promises to improve patient quality oflife, then we have the flexibility to adaptour resources and activities to accommodateits development.Upcoming productsDaxas ®Chronic obstructive pulmonary disease(COPD) remains a significant area of unmetmedical need. It is a progressive and irreversiblelung disease that restricts breathing. Accordingto World Health Organisation (WHO)estimates, 80 million people have moderateto severe COPD worldwide.Around 5% of all deaths globally can beattributed to COPD and the WHO predictsthat total deaths could increase by morethan 30% in the next 10 years unless urgentaction is taken to reduce causal risk factors,especially smoking.Daxas ® (Roflumilast) is a phosphodiesterase-4(PDE4) inhibitor that is being developedto treat the underlying inflammationin COPD and related inflammatory diseases.It could be both the first PDE4 inhibitorand the first orally administered anti-inflammatorytreatment for COPD patients.As a once-daily, non-steroidal anti-inflammatorytreatment, Daxas ® offers theopportunity for a new approach to the treatmentof COPD. The results from two pivotal12-month studies showed positive effects onexacerbation rates and pulmonary function(FEV1). Two supporting six-month studiesconfirmed the efficacy of Daxas ® when usedwith standard bronchodilator treatments.Daxas ® has been developed by Nycomedand we are filing for marketing authorisationin Europe, the US and Japan in 2009. Daxas ®is partnered for co-development withMitsubishi Tanabe Pharma Co. in Japan. Thecommercialisation of Daxas ® in the UnitedStates will also take place through a partner.Once approved, Daxas ® has the potential tobecome a significant brand for Nycomed.Instanyl ®Nearly half of all early-stage cancer patientsand up to 90% in later stages suffer thesudden onset of brief but acute ‘breakthrough’pain. This refers to intermittentflare-ups that overcome the patient’s regularpain medication. The unpredictability andCompany Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 21severity of these attacks can have a highlydeleterious effect on the patient’s moraleand quality of life. Sufferers need somethingthat will give immediate relief. Instanyl ® isan intranasally applied Fentanyl spray thathas been developed in-house by Nycomed.It is intended for managing breakthroughpain in adult cancer patients.Nasal Fentanyl has a profile that will providepatients with a rapid onset of action andadequately short duration, closely matchingthe typical breakthrough pain episode.Instanyl ® was filed for EU approval inDecember 2007. Nycomed plans to launchInstanyl ® during the second half of 2009.Two in-licensing examplesOptesia ®At present, there is no standard regimenfor post-operative pain treatment. Painmanagement is generally achieved with acombination of different drugs, such as nonsteroidalanti-inflammatory drugs (NSAIDs),paracetamol, opioids and short-acting localanaesthetics (wound infiltration and nerveblocks). However, NSAIDs on their own areoften inadequate analgesics for moderateand severe pain, while opioids can causeserious side effects and local anaestheticsonly last for a few hours.Optesia ® (Saber-bupivacaine) addressesthis unmet medical need for long-termpost-operative pain relief in a number ofsurgical procedures. Bupivacaine blockssensory nerve impulse conduction to thebrain’s cortex and is slowly released fromthe administered drug to provide longlastingpain relief.Optesia ® is in-licensed from Durect Corp.and is currently in phase II clinical development.Nycomed has the commercial rightsfor Europe, Russia, CIS, Australia and anumber of Latin American countries.VeltuzumabNycomed and Immunomedics are collaboratingon Veltuzumab, a humanised anti-CD20antibody that is currently undergoing clinicaltrials in cancer and autoimmune diseases.Anti-CD20 antibodies target B-cells, whichplay an important role in the productionof autoantibodies and are the major causeof various autoimmune diseases, includingrheumatoid arthritis (RA).Nycomed is developing Veltuzumab forrheumatoid arthritis as the primary indication.Under the agreement with Immunomedics, wehave exclusive, worldwide rights to develop,manufacture and commercialise the subcutaneousformulation of Veltuzumab for thetreatment of all non-cancer indications.Veltuzumab is currently in phase II clinical trials.Clinical development pipeline features promising projectsPhase I Phase II Phase III RegistrationRoflumilast dermalAtopic dermatitis/ psoriasisOptesia ®Incision-related painPartner: DurectImagify ®Cardiovascular imagingPartner: AcusphereInstanyl ®Breakthrough painPDE4 inhibitorInflammationVeltuzumabRheumatoid arthritisPartner: ImmunomedicsTeduglutideShort bowel syndromePartner: NPSDaxas ® , COPDPartner Japan: MitsubishiTanabe PharmaCiclesonide HFA nasalAllergic rhinitisPartner: SepracorAlendronate effervescentOsteoporosisPartner: EffRxOur pipeline is built from our own research and through co-developments with partners. Co-development with partners

22 Nycomed Annual Report 2008Corporate Governance>Corporate GovernanceAs a privately owned company, we haveobligations to our financial stakeholders. Inaccordance with our financial arrangements,we prepare financial reports that complywith set standards.CORPORATE STRUCTURENycomed S.C.A. SICAR was establishedon 30 November 2006 in Luxembourg.Nycomed S.A. is the general partner companyand the sole manager in Nycomed S.C.A.SICAR and is, therefore, formally themanagement of the Nycomed Group. TheBoard of Directors in the general partnercompany consists of the individuals listed inthe Board of Directors section. The Boardis elected at the Annual General Meeting.The Board appoints and supervises theExecutive Committee, and oversees theCompany’s performance and results. Dailymanagement is carried out by the ExecutiveManagement Committee. In addition tothe Executive Management and the AuditCommittee, there are three othercommittees:• The Development Portfolio Committeedecides which projects enter development.It also reviews development projects andmakes decisions on developmentprogrammes and levels of investment.• The Licensing Committee determines thein- and out-licensing strategy, approveslicensing opportunities and reviews theperformance of licensing partnerships.• The Commercialisation and LifecycleManagement Committee reviews anddecides on Lifecycle Management (LCM)plans, agrees on LCM projects and decideson global strategy and launch plans for keyproducts.Nycomed has an independent internal auditfunction which reports directly to theNycomed Audit Committee which approvesthe functions charter, audit plan and budget.The internal audit function providesindependent and objective assurance withregard to internal controls and governance.All subsidiaries are internally audited, withaudit visits occurring at least every secondyear.SHAREHOLDERSThere are two classes of shares. Thereare no differences in voting rights andall shareholders are entitled to have mattersconsidered at the Annual General Meeting.For details of management incentiveprogrammes, please refer to the FinancialStatements section.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 23As at 31 December 2008, the following shareholdersheld more than 5% of the collective shareholding:Share Share ownershipShareholders ownership (fully diluted)Nordic Capital 42.7% 39.6%• Nordic Capital V, L.P. 24.0% 22.3%• Nordic Capital VI, Alpha LP 8.3% 7.7%• Nordic Capital VI, Beta LP 9.7% 9.0%• Other co-investors (less than 5% ownership) 0.7% 0.6%Credit Suisse (DLJMB) 25.9% 24.0%• DLJ Offshore Partners III, C.V. 18.0% 16.7%• Other co-investors (less than 5% ownership) 7.9% 7.3%Coller International Partners 9.7% 9.0%• Coller International Partners IV Limited as nominee for Coller International Partners 5.3% 4.9%IV-D, L.P., Coller International Partners IV-E, L.P. and Coller German Investors GmbH & Co. KG• Other co-investors (less than 5% ownership) 4.4% 4.1%Avista 6.6% 6.1%• ACP Nycom Holdings, LLC 6.6% 6.1%Others (less than 5% ownership) 15.1% 21.3%

24 Nycomed Annual Report 2008Corporate Governance>Risk ManagementNycomed operates in a highly competitiveand regulated business area. Specific risks areinherent in our product range and businessmodel of in-licensing products.Risk Management ProcessOverseen by its Risk Management Committee,representing senior managers from all functionsof the group, Nycomed implements asystematic, integrated process to continuallyassess a wide range of functional andcross-functional risks and opportunities. TheIntegrated Risk Management approach increasesour ability to assess and understand functionalrisks as well as the interaction on the crossfunctionallevel.All functions go through a risk assessment.This assessment includes risk identification,analysis, estimation and prioritising. All riskassessments take likelihood as well as potentialimpact on the business into account. Impactsare quantified and assessed in terms ofpotential financial loss and reputationaldamage.Significant risks are reported to the RiskOffice together with action plans onhow to manage these risks. Reported risksare consolidated into a group Risk Register.This information is presented to theRisk Management Committee, whichchallenges the overall risk and actionprofile.The process is linked to the strategicplanning process and considers bothfinancial and non-financial risks.Financial risksFinancial risks at Nycomed are managedcentrally. The overall objectives and policiesfor Nycomed’s financial risk managementare outlined in a Treasury Policy.The Group does not engage in financialtransactions or risk exposures that are notrelated to the hedging of underlying businessdriven risk. Only transactions that are justifiedfrom a hedging perspective are allowed.Consequently, Nycomed does not enter intospeculative positions.Nycomed, is currently impacted by currencyfluctuations, which could have an impact onprofits. We use derivatives with the aim oflimiting losses from fluctuations in theexchange rate of the Euro against othercurrencies, especially the US Dollar, theMexican Peso, the Brazilian Real, NorwegianKroner, Japanese Yen or the Canadian Dollar.Only forward exchange deals, currencyswaps and simple currency options are used.These were transacted exclusively withbanks that have defined credit ratings.Currency risk related to debtA part of the outstanding debt in Nycomedis denominated in US Dollar in order tomitigate the current cash flow and theUS Dollar value of Nycomed in a potentialexit. With the purpose of preserving a partof the unrealised gain on this part of the debtwe entered into four cross currency swapsduring the first half of 2008. In Novemberwe re-struck the swaps, with the effect ofrealisation part of the unrealised gain.In December 2008, Nycomed invested partof the cash in buying back its own debt. Thenominal value of the bought back debt is€ 54.8 million.Foreign exchangeThe Group’s main objective is to reduce,where it is deemed appropriate to do so,fluctuations in earnings and cash flowsassociated with the changes in marketforeign currency rates.Currency risk can be classified in twocategories: transaction risk and translationrisk. The Group’s transaction risk primarilyrelates to the potential change in value offuture operations and cash flows resultingfrom changes in currency rates. Translationrisk is related to the translating of potentialchange in carrying value of assets andliabilities in foreign currencies. We are mainlyexposed with regard to US Dollars, CanadianDollars, Brazilian Real, Mexican Pesos, RussianRoubles, Norwegian Kroner, Danish Kronerand Japanese Yen.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 25InterestNycomed has a significant level of debt witha variable interest rate. Changes in interestrates affect our income statement as well asthe balance sheet. The overall objective ofinterest rate risk management is to limit thenegative impact on earnings from interestrate fluctuations.In accordance with the Senior FacilityAgreement at least 50.0% of the interestrate risk was swapped into a fixed interestrate before 31 March 2007. The duration ofthe hedge should be at least two years. Asper 31 December 2008, 76.0% of our debtwas hedged using interest rate swaps whichall expire at the end of March 2009.During January and February 2009 weentered into new interest rate swaps witha duration of 18 months starting from31 March 2009. The recent interest rateswap agreements cover approximately65.0% of our total interest rate risk.CreditNycomed continuously monitors and evaluatescredit risk on outstanding payments. Ingeneral, we estimate the risk to be limitedfor countries in the EU.In Russia/CIS, the standard payment conditionsare cash payment 90-day payment terms.During 2008, Nycomed continued our strictcontrol and close follow-up on outstandingpayments. Nycomed has had very fewdefaulted payments in this region since theRouble crisis in 1998. The company maintainsthat this region is subject to higher thanaverage political and economic risk and wecontinue to make every effort to securepayment from our customers. The companytries to cover outstanding payments throughinsurance companies. As at 31 December 2008,Nycomed had € 97.5 million outstandingreceivables from customers in Russia/CIS, ofwhich 50.5% was covered by credit insurance.We also evaluate on a continuous basis ourcredit risk on financial counterparties.Working capitalDue to the current rate of growth in countrieswith higher than average outstanding – likeCIS and Latin America, the company isexperiencing increased pressure on ourworking capital and longer cycles. During thelast months of 2008 we experienced someprolongation in the payment terms withinthe industry in CIS/Russia.InsuranceNycomed has an extensive insuranceprogramme providing coverage for therisk of damage to employees, assets, andprofitability resulting from occurrencesbeyond our control. Damage caused byNycomed is included in the insuranceprogramme as well. The risks are regularlyassessed in order to obtain appropriateinsurance cover on competitive terms.Commercial risksOne of the key responsibilities of theExecutive Management is to continuouslyassess and discuss business risks. The Boarddiscusses the commercial risks outlinedbelow on a case-by-case basis.Listed below are examples of the current,most relevant risks (i.e. where the combinationof impact and vulnerability is highest), alongwith counter measures.

26 Nycomed Annual Report 2008Corporate Governance>Business environmentOur business is subject to extensivegovernment regulation, control andapproval.In addition, continued cost-control effortsby governments and managed-careorganisations may lead to lower pricing andreimbursement levels. Nycomed regularlyundertakes thorough evaluations of thepotential impact these scenarios could haveon our product development and marketingactivities. Pricing and reimbursementevaluations are also conducted before weenter into any agreements to in-license newproducts.Nycomed´s operations in some countriesand regions are subject to a high degree ofpolitical and economical risk. Russia/CISis currently one of our largest and fastestgrowing markets and Nycomed remainsvigilant and highly focused in this particularregion. Financial risk management is animportant tool to minimise risk in the shortterm. In the longer term, Nycomed is buildingup operations in lower-risk markets withsignificant growth potentialIn-licensingNycomed’s strategy for expanding itsproduct base is to acquire project assets orlicenses at all stages of research, developmentand commercialisation. In-licensing isperformed globally and on a local level.The majority of the future pipeline is expectedto come from agreements and collaborationswith partners. Nycomed’s commercial andR&D organisation is prepared to meetspecific needs for partnering projects. Thisputs us in a favourable position for gainingaccess to product ideas in an increasinglycompetitive in-licensing environment.Therefore, future growth and success dependson the ability to identify, in-license, acquire,develop and market new products. Beforelicensing a new product, its commercialpotential, along with the product’s medicalutility, and its potential risks, are assessed bya team of specialists who produce a detailedevaluation report. In this way, Nycomedseeks to ensure that the decision-makingprocess results in commercially viable,profitable investments.Dependency in the development competencies,the commitment and the financial situationof co-development partners are risk factorsthat we assess prior to a final decision. Havingagreed on a collaboration, we and thepartner dedicate project managers andexecutive teams to expedite implementationand execution.Nycomed’s focus on projects for in-licensingmay increase risk if a key product facesunexpected clinical, regulatory or competitivechallenges. To minimise this risk, we seek tothoroughly evaluate a project’s feasibilitybefore engaging in collaboration and toestablish an efficient sourcing process withthe ability to rapidly screen opportunities.PeopleHighly qualified and motivated employeesare key for Nycomed. To be attractive fornew staff and retain our employees in thelong term, Nycomed recognises and rewardsperformance, and offers a multitude of furthereducation and training programmes.Nycomed encourages transparent objectivesand the clarification of each individual’scontribution to company performance, sothat all resources are focused on commongoals. In this context, Nycomed hasintroduced a global performance reviewsystem for senior executives – linked to thevariable compensation system “Allegro”. Thissystem takes into account our globalbusiness performance, the local company’ssuccess and the achievement of individualobjectives. In this way, the company creates afurther incentive for attaining our corporateobjectives.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200827Through the Nycomed Academy, managersand senior levels of staff are offered theopportunity to continuously develop and excelin important management and leadershipskills, as well as globally align their knowledgeand understanding of the corporate strategy.To ensure Nycomed is proactive in aconstantly changing environment, our changemanagement training courses prepare andequip management to be key drivers in thechange process. In addition to the trainingand development initiatives, the Academyoffers management the opportunity toexchange knowledge and experience in aninterdisciplinary and international manner,these events offer participants an effectivesetting to develop internal networks ensuringthe capturing and sharing of best practice.Safety, Health & EnvironmentNycomed adheres to the extensive andstringent environmental protection and safetyregulations in Europe as well as in the othermarkets in which we are active.In light of increasing costs and competitivepressure, efficient environmental protectionis becoming more and more important. Thusappropriate management systems help us toimprove our resource and energy efficiencyand to avoid waste, resulting in a systematicallyexploited cost reduction potential relevantto environmental protection.Nycomed embraces the idea that everyaccident is avoidable and we aim for aworking environment free of accidents.Adequate management systems help us toreduce the number of absence days and thenumber of events causing severe damage inorder, ultimately, to minimise risks and toimprove the company’s economic efficiency.Business activities to achieve our SHE-standardsare managed by the local site manager andinvolve management and employees byencouraging them to act in a sustainableway, whilst at the same time maintainingprofitability and competitiveness.Following the aquisition of Altana Pharma,the company is working to align its Safety,Health & Environment (SHE) policies tocover the full extent of our activities. Inaddition we will implement the principles ofSHE-Management-Systems of “ResponsibleCare” – a worldwide initiative aimed atprotecting natural resources. Two of ourCompetence Centers and our German R&Dunit are already certified in accordance withEMAS and ISO14001.Nycomed has implemented a worldwidequality standard for Safety, Health andEnvironment, which is a part of theNycomed quality management system.

28 Nycomed Annual Report 2008Corporate Governance>Board of DirectorsNationality Born Remuneration as Nycomed Other board Chairman ofboard member shares held membershipsToni Weitzberg Swedish 1950 - - Synphora AB Atos Medical ABChairman of the Board Biovitrum AB ConvatecPermobile ABHåkan Björklund Swedish 1956 - Shares: 58,976 Atos Medical AB -CEO Warrants: 147,800 ColoplastDanisco A/SThompson Dean American 1958 - - IWCO Holding -Star Tribune Co.VWR Inc.ConvatecCarl-Gustaf Johansson Swedish 1937 50,000 USD - – Avaris ABImed ABNeuroNova ABKristoffer Melinder Swedish 1971 - - Atos Medical Holding 2 AB -ConvatecColin Taylor Canadian 1962 - - Glacier Luxembourg -Two S.a.r.l.Supervisory Boards ofGrohe AG andGrohe Beteiligungs GmbHand Director of Glacier G.P.The Queens School University(Canada)EATG S.a.r.l.EATG Cayman LimitedEATG (Debtco) LimitedEATG (Bidco) LimitedGuala Closures SpANewton Aguiar American 1964 - - Glacier G.P. -Guala Closures S.p.A.Supervisory Boards ofGrohe AG andGrohe Beteiligungs GmbHCompany Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200829Executive CommitteeTitle Nationality Born Number of years Academic degreesin industryHåkan Björklund Chief Executive Swedish 1956 24 PhD in Neuroscience from KarolinskaOfficerInstitutet, SwedenRunar Bjørklund Chief Financial Norwegian 1956 19 MSc in Business from Lund University,OfficerSwedenCharles Depasse Executive Vice President Belgian 1958 23 Electromechanical Engineering degree fromHuman Resourcesthe University of Brussels, Belgium, and anMBA from New York University, USAAnders Ullman Executive Vice President Swedish 1956 18 Physician and clinical pharmacologist with a PhDResearch andfrom the University of Gothenburg, SwedenDevelopmentKerstin Valinder Executive Vice President Swedish 1960 24 University Certificate in Journalism fromBusiness Developmentthe University of Gothenburg, SwedenMichael Kuner Executive Vice President German 1958 19 Law graduate from the University of Freiburg,General CounselGermanyAdmitted to the German BarBarthold Piening Executive Vice President German 1958 20 PhD in Pharmaceutical Chemistry from KielOperationsUniversity, Germany, and an MBA from WHUKoblenz, Germany, and the NorthwesternUniversity of Chicago, USADick Söderberg Executive Vice President Swedish 1958 24 BSc in International Economics and BusinessMarketingAdministration from Uppsala University, Sweden(until 30.11.08)Guido Oelkers Executive Vice President German 1965 23 PhD in Strategic Management from UniversityCommercial Operationsof Australia, Adelaide MA in Economics, Southbank(from 01.09.08)University London and German University Degreein Business Administration (Dipl-Betriebswirt), inMainz, Germany

30 Nycomed Annual Report 2008Financial Statements>Financial StatementsACCOUNTING POLICIESThe consolidated financial statement ofNycomed S.C.A. SICAR (the Company)incorporates the accounts of the Companyand its subsidiaries (collectively, the Group)as at and for the year ended 31 December2008.Basis of preparationThe consolidated financial statements havebeen prepared in accordance with InternationalFinancial Reporting Standards (IFRS) asadopted by the EU. The consolidated financialstatements have been prepared on a historicalcost basis, except for available-for-salefinancial assets, financial assets and liabilities(including derivative financial instruments)that have been measured at fair value. Thecarrying values of recognised assets andliabilities that are hedged in fair value hedgesthat would otherwise be carried at cost areadjusted to record changes in the fair valueattributable to the risks that are being hedged.The consolidated financial statements arepresented in Euros, and all values are roundedto the nearest thousand (€ thousand) exceptwhen otherwise indicated.Basis of consolidationThe consolidated financial statements comprisethe financial statements of Nycomed S.C.A.SICAR (the parent company) and all thecompanies in which Nycomed S.C.A. SICARdirectly or indirectly owns more than 50%of the voting rights, or in some other wayhas a controlling influence (subsidiaries).Nycomed S.C.A. SICAR and these companiesare referred to as “the Group”.The consolidated financial statements areprepared on the basis of the financialstatements of the parent company and thesubsidiaries and by consolidating uniformaccounting items. The consolidated financialstatements are based on financial statementsprepared by applying the Group’s accountingpolicies and for the same reporting period.On consolidation, intra-Group transactions,shareholdings, intra-Group dividends andbalances and realised and unrealised gainsand losses on intra-Group transactions areeliminated. Minority interests, proportionalshares of profit or loss and the net assets aredisclosed as separate items in the incomestatements and within equity in theconsolidated balance sheet respectively.The Group accounts for its investments injoint ventures using the proportionalconsolidation method as permitted underIAS 31 “Financial Reporting of Interestsin Joint Ventures”. These joint venturesinclude Nycomed Madaus, South Africa,and Zydus Nycomed Healthcare, India.Changes in accounting policies or theeffect of new pronouncements.The accounting policies adopted are consistentwith those of the previous financial yearexcept the application of IFRIC 14 – The limiton a defined benefit asset, minimumfunding requirements, mandatory for theperiod beginning on or after 1 January 2008and IFRIC 11 IFRS 2 Group and Treasuryshare transactions, mandatory for periodsbeginning on or after 1 March 2008.IFRIC Interpretation 14 provides guidance onassessing the limit in IAS 19 on the amountof the surplus that can be recognised as anasset. It also explains how the pension assetor liability may be affected by a statutory orcontractual minimum funding requirement.The above mentioned amendment did notimpact Nycomed’s financial statement.IFRIC 11 requires that arrangements wherebyan employee has the right to an entity’sinstruments being accounted for as anequity-settled scheme, even if: a) the entitychooses to buy those equity instruments(e.g. treasury shares) from another party,or b) a shareholder of the entity providesthe equity instruments needed. Theinterpretation also sets out requirementsas to how subsidiaries, in their separatefinancial statements, should account forschemes when their employees receiveequity instruments of the parent. The abovementioned amendment did not impactNycomed’s financial statement.Other IFRS, IAS and IFRIC Interpretations,that may potentially be relevant to Nycomed,were issued, but they are not effective yet.• Amendments to IFRS 2 “Share-basedPayment – Vesting Conditions andCancellations” is effective for periodsstarting on or after 1 January 2009.• IFRS 3 “Business Combination” (revised) iseffective for periods starting on or after1 July 2009.• IAS 1 “Presentation of FinancialStatements” (revised) is effective forperiods beginning on or after 1 January2009.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 31• IAS 23 “Borrowing Costs” (revised) iseffective for periods beginning on orafter 1 January 2009.• IAS 27 “Consolidated and SeparateFinancial Statements – Cost of anInvestment in a Subsidiary, JointlyControlled Entity or Associate”(amendments) effective for periodsbeginning on or after 1 January 2009,requires the effects of all transactionswith non-controlling interests to berecorded in equity if there is no change incontrol and these transactions will nolonger result in goodwill or gains andlosses.• IAS 27 “Consolidated and SeparateFinancial Statements – Cost of anInvestment in a Subsidiary, JointlyControlled Entity or Associate”(amendments) effective for periodsbeginning on or after 1 January 2009, alsospecifies the accounting when control islost. Any remaining interest in the entity isre-measured to fair value, and gains andlosses are recognised in profit or loss.• IAS 32 “Financial instruments:Presentation” and IAS 1 “Presentation ofFinancial Statements – Puttable FinancialInstruments and Obligations Arising onLiquidation” (amendments) are effectivefor periods beginning on or after1 January 2009.• IAS 39 “Financial Instruments: Recognitionand Measurement” is effective for periodsbeginning on or after 1 July 2008.• IAS 39 “Financial Instruments: Recognitionand Measurement – Eligible HedgedItems” (amendment) is effective forperiods beginning on or after 1 July 2009.• IFRIC 13 “Customer Loyalty Programmes”is effective for periods beginning on orafter 1 July 2008.• IFRIC 16 “Hedges of a Net Investment in aForeign Operation” is effective for periodsbeginning on or after 1 October 2008.In August 2008, IASB also adopted a projectto deal with non-urgent but necessaryamendments to IFRS named “Improvementsto International Financial Reporting Standards”.The Improvements are effective for periodsbeginning on or after 1 January 2009 unlessstated otherwise. The standards affected arethe following: IFRS 5 “Non-current AssetsHeld for Sale and Discontinued Operations”;IAS 1 “Presentation of the FinancialStatements”; IAS 16 “Property, Plant andEquipment”; IAS 19 “Employee Benefits”;IAS 23 “Borrowing Costs”; IAS 27“Consolidated and Separate FinancialStatements”; IAS 28 “Investments inAssociates”; IAS 31 “Interests in JointVentures”; IAS 36 “Impairment of Assets”;IAS 39 “Financial Instruments: Recognitionand Measurement”; IAS 40 “InvestmentProperty”.The Group decided not to adopt the abovementioned amended standards early. Theyare however not expected to have anymaterial effect on recognition andmeasurement at the time of the adoption.Except as described above, the accountingpolicies set out below have been appliedconsistently to all periods presented in theseconsolidated financial statements and havebeen applied consistently by Group entities.SIGNIFICANT ACCOUNTING ESTIMATESAND JUDGEMENTSThe preparation of the Group’s consolidatedfinancial statements in conformity with IFRSrequires management to make judgements,estimates and assumptions that affect thereported amounts of revenues, expenses,assets and liabilities, and the disclosure ofcontingent liabilities at the reporting date.Management bases its estimates on historicalexperience and various other assumptionsthat are believed to be reasonable under thecircumstances. This forms the basis formaking judgements about the reportedcarrying amounts of revenues and expensesthat may not be readily apparent from othersources. Actual results could differ fromthose estimates. Estimates are used whenaccounting for sales discounts and incentives,depreciation, amortisation, employeebenefits, restructuring and other provisions,contingencies and any asset impairments.Revisions to accounting estimates arerecognised in the period in which the estimateis revised and in any future periods affected.Management believes the following arethe significant accounting estimates andrelated judgements used in the preparationof its consolidated financial statements.

32 Nycomed Annual Report 2008Financial Statements>Indirect production costWork in progress and finished goods arerecognised at cost measured by using theaverage weighted price method. Costcomprises direct production costs, such asthe cost of raw materials, consumables,energy and labour, and indirect productioncosts, such as employee cost, depreciationand maintenance.The indirect production costs are measuredbased on a standard cost method, which isreviewed regularly in order to ensurerelevant measures of utilisation, production,lead-time and other relevant factors.Changes in the method for calculatingindirect production costs, includingutilisation levels and production lead time inthe calculation of indirect production costs,could have an impact on the gross marginand the overall valuation of inventories.Deferred taxesManagement’s judgement is required indetermining the Group’s provision for incometaxes, deferred tax assets and liabilities whichcan be recognised. The Group recognisesdeferred tax assets if it is probable thatsufficient taxable income will be available inthe future, against which the temporarydifferences and unused tax losses can beutilised.Impairment of goodwill and otherintangible assetsThe group determines whether goodwill andother intangible assets, such as patents, rightsand development projects, are impaired atleast on an annual basis. This requires anestimation of the value in use of the overallbusiness and of some separate intangibleassets. Estimating the value in use requiresthe Group to make an estimate of theexpected future cash flows from the overallbusiness and other intangible assets and alsoto choose a suitable discount rate in order tocalculate the present value of those cash flows.Sales and revenue recognitionThe Group derives revenue from twoprimary revenue streams, namely productsales and the licensing of product rights.Sales represent the fair value of the saleof goods excluding value added tax and,after deduction of provisions for tradediscounts, allowances and returned products.Revenue from the sale of goods isrecognised when all the following specificconditions have been satisfied:• Nycomed has transferred to the buyerthe significant risk and rewards ofownership of goods.• Nycomed retains neither continuingmanagerial involvement to the degreeusually associated with ownership noreffective control over the goods sold.• The amount of revenue can be measuredreliably.• It is probable that the economic benefitassociated with the transaction will flowto Nycomed.• The costs incurred, or to be incurred, inrespect of the transaction can bemeasured reliably.These conditions are usually met by the timethe products are delivered to the customerwith regard to revenue from product sales.However, in the case of royalty incomerelated to the licensing of product rights,these conditions are usually met when royaltybecomes payable or on an accrual basis inaccordance with the substance of the relevantagreement. In certain circumstances, theGroup enters into long-term contracts thatprovide an upfront payment in lieu of futureroyalty payments. This payment is recordedas deferred revenue and recognised in incomeover the contractual period until payment isnon-refundable, based on the expectedunderlying product sales.Upfront payments are initially recognisedwhen research and development contractsare signed. Upfront payments that areattributable to subsequent research and/ordevelopment activities are recognised asdeferred revenue and will subsequently berecognised as revenue over the expectedcontract period. Non-refundable upfrontpayments that are not attributable tosubsequent research and/or developmentactivities are recognised as revenue when thecontracts are signed. Upfront fees inconnection with licensing agreements arerecognised as income over the period towhich they relate.Provisions for discounts, rebates to customersand customer returns are estimated andprovided for in the period when the relatedsales are recognised and reflected in net sales.Royalties are not disclosed separately fromother income since the amount is not materialto Nycomed.Research and development expensesResearch and development expenses compriseexpenses that relate to the Group’s researchand development functions, including wagesand salaries, depreciation and other overheads.Any milestone payments to third parties inrespect of research and development arerecognised in the income statement, or arecapitalised as appropriate, in the period inwhich the milestones are reached.Research expenses are charged to the incomestatement as incurred. Development expensesare capitalised if certain criteria are met andthey are likely to generate future economicbenefits.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 33Consolidation principlesPlease refer to the “Basis of consolidation”section.Foreign currency translation,functional and presentation currencyThe consolidated financial statements arepresented in Euros, which is Nycomed’sfunctional and presentation currency.A functional currency is designated for eachentity in the Group. The functional currencyis the currency used in the primary economicenvironment in which the individual entityoperates. Transactions denominated incurrencies other than the functional currencyare transactions in foreign currency.Since 1 January 2008, the Russian entitieshave used the Russian Roubles as functionalcurrency. In previous years, US Dollar was thefunctional currency.Translation of transaction and balancesTransactions in foreign currencies are initiallyrecorded in the functional currency rate rulingat the date of the transaction. Monetaryassets and liabilities denominated in foreigncurrencies are retranslated at the functionalcurrency rate of exchange ruling at the balancesheet date. All differences are taken to profitor loss with the exception of differences onforeign currency borrowings that provide ahedge against a net investment in a foreignentity. These are taken directly to equityuntil the disposal of the net investment, atwhich time they are recognised in profit orloss. Tax charges attributable to exchangedifferences on those borrowings are alsodealt with in equity. Non-monetary items,which are measured in terms of historicalcost in a foreign currency, are translatedusing the exchange rates as at the dates ofthe initial transactions. Non-monetary itemsmeasured at fair value in a foreign currencyare translated using the exchange rates atthe date when the fair value wasdetermined.Translation of financial statements andgroup companiesFor consolidation purposes, the incomestatements of foreign subsidiaries withfunctional currencies other than Euros aretranslated at transaction rates, and assets andliabilities are translated using balance sheetrates. Transaction rates are calculated as theaverage rates of the individual month to theextent that this does not provide a materiallydifferent picture. Exchange rate differencesare recognised directly in capital and reserves.Business combinationsEnterprises acquired during the year arerecognised in the consolidated financialstatements from the date on which controlcommences. Enterprises disposed of orliquidated are recognised in the consolidatedincome statement until the date on whichcontrol ceases or the entity is liquidated.Acquisitions of enterprises in which theparent company obtains control are accountedfor by using the purchase method. Thepurchase price is measured as the fair valueof the assets given and liabilities incurred orassumed at the date of exchange, plus costsdirectly attributable to the acquisition.Identifiable assets acquired and liabilities andcontingent liabilities assumed in a businesscombination are measured initially at theirfair values at the acquisition date, irrespectiveof the extent of any minority interest.Identifiable intangible assets are recognisedinsofar as they are separable or arise fromcontractual rights and a reliable fair value canbe calculated. The amount in deferred taxresulting from the restatement is recognised.The excess of the cost of acquisition over thefair value of the acquired asset, liability andcontingent liability is capitalised as goodwill.Goodwill is tested annually for impairment– the first impairment test is performedbefore the end of the year of acquisition.Upon the acquisition, goodwill is allocatedto the cash-generating unit, subsequentlyproviding a basis for the impairment test.If the initial accounting for a businesscombination can be determined onlyprovisionally by the end of the period inwhich the combination is effected,adjustments made within twelve months ofthe acquisition date to the provisional fairvalue of acquired assets, liabilities andcontingent liabilities or cost of the acquisitionare adjusted to the initial goodwill. Theadjustment is calculated as if it was recognisedat the acquisition date. The effect of theadjustment is recognised in capital andreserves, and the comparative figures arerestated. Subsequent to this period, goodwillis only adjusted for changes in estimates ofthe cost of the acquisition that are contingenton future events. However, subsequentrealisation of deferred tax assets notrecognised on acquisition will result in therecognition in the income statement of thetax benefit concurrently with a write-downof the carrying amount of goodwill to theamount that would have been recognised ifthe deferred tax asset had been recognisedat the time of the acquisition.Gains or losses on the disposal or liquidationof subsidiaries and associates are measuredas the difference between the sales orliquidation amount and the carrying amountof net assets, including goodwill at the dateof disposal plus anticipated disposal orliquidation costs. Entities in which the Groupand outside shareholders have agreed toexercise joint control over significant financialand operational policies are accounted forusing the proportionate consolidationmethod. A list of all the subsidiaries ispresented separately.

34 Nycomed Annual Report 2008Financial Statements>Income statementCost of salesCost of sales consists of variable productioncosts, including the cost of raw materials,other production materials and direct labourcosts. In addition, cost of sales includes fixedproduction overhead costs, such as the costof indirect labour and materials, repairs,maintenance and depreciation costs relatedto property, plant and equipment used inthe production process and costs related toproduction administration and management.Amortisation of fair valueadjustments on inventoriesfrom acquisitionAmortisation of fair value adjustments oninventories from acquisition includes thewrite-off of inventory step-up in connectionwith purchase price allocation related to theacquisition of former Altana Pharma AG.Sales and marketing expensesSales and marketing expenses comprise allexpenditures incurred in connection withthe selling and marketing of the Group’sproducts, including distribution costs andamortisation of intangible assets.Amortisation of fair valueadjustments on patents andrights from acquisitionAmortisation of fair value adjustments onpatents and rights from acquisition includes thefair value adjustments on brands in connectionwith purchase price allocation related to theacquisition of former Altana Pharma AG.Administrative expensesAdministrative expenses comprise costs relatingto the Group’s management and administration,office premises and depreciation.Integration/restructuring costsIntegration/restructuring costs representmainly severance, consulting and other onetimeexpenses as an effect of the corporaterestructuring.Financial income and expensesFinancial income and expenses compriseinterest, amortisation of financing costs,realised and unrealised exchange gains andlosses, and other financial expenses. Theunrealised exchange gains and losses includechanges in the fair value of derivativesdesignated as fair value hedges.Income tax (expense) benefitIncome tax is allocated to the relevant fiscalyear and recognised in the income statement.Income tax comprises current tax as well asdeferred tax.Balance sheetIntangible assetsIntangible assets acquired separately aremeasured on initial recognition at cost.The cost of intangible assets acquired ina business combination is fair value as atthe date of acquisition. Following initialrecognition, intangible assets are carriedat cost, less any accumulated amortisationand any accumulated impairment losses.The useful lives of intangible assets areassessed to be either finite or indefinite.Intangible assets with finite lives areamortised over their useful economic lifeand assessed for impairment wheneverthere is an indication that the intangibleasset may be impaired.The amortisation period and the amortisationmethod for an intangible asset with a finiteuseful life are reviewed at least at everyfinancial year-end. Changes in the expecteduseful life or the expected pattern ofconsumption of future economic benefitsembodied in the asset are accounted for bychanging the amortisation period or method,as appropriate, and treated as changes inaccounting estimates. The amortisationexpense on intangible assets with finite livesis recognised in the income statement in theexpense category consistent with the functionof the intangible asset. Intangible assets withindefinite useful lives are tested forimpairment annually. Such intangibles arenot amortised. The useful life of anintangible asset with an indefinite life isreviewed annually to determine whetherindefinite life assessment continues to besupportable. If not, the change in the usefullife assessment from indefinite to finite ismade on a prospective basis. As at December2008 all intangible assets are amortisedexcept development projects in progress.For further information see below.Costs relating to development projectsare capitalised if all of the followingcapitalisation requirements are met:• It is probable that all the necessaryregulatory approvals, public registrationand marketing authorisations will bereceived.• The completion of products is technicallyfeasible.• There is an ability and continuingintention to complete the underlyingproduct and use or sell it.• The costs related to the development ofthe product are readily measurable.• Future economic benefits are likely tobe generated.If these criteria are not met, all developmentexpenditure are expensed as incurred.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 35In determining the probability of regulatoryapproval, the following are regarded asstrong indicators that a product will receiveregulatory approval:• The product is a generic substitute of anapproved product.• The product is approved in other countrieswith similar approval requirements.• The product is in late phase II or phase IIIclinical trials with the results of previoustrials indicating that there is no obviousreason why the product should not beapproved.• The product is based on a knownsubstance or existing product.These development projects are amortisedover the life of the associated product;amortisation begins when the productbecomes marketable. Distribution rights topharmaceutical products that are acquiredfrom third parties, prior to receipt ofregulatory approval to market the productsare capitalised in certain circumstances usingthe same criteria as for the capitalisation ofdevelopment expenses. These rights areamortised on a straight-line basis over theirestimated useful life once the product hasbegun to be distributed. Intangibles aresubject to an impairment test when eventsor circumstances indicate that impairmentmay exist. The amortisation periods aregenerally as follows:• Completed development projects andpatent and distribution rights: 2-21 yearsGoodwillGoodwill is initially measured at cost asdescribed under “Business combinations”.Following initial recognition, goodwill ismeasured at cost less any accumulatedimpairment losses. Goodwill is reviewed forimpairment annually or more frequently ifevents or circumstances indicate that thecarrying value may be impaired.Property, plant and equipmentProperty, plant and equipment are measuredat cost, less accumulated depreciation andimpairment losses. Costs comprise the purchaseprice and any costs directly attributable tothe asset purchase until the asset is availablefor use.Depreciation is generally calculated on astraight-line basis over the expected usefullives of the assets, as follows:Buildings 5–50 yearsMachinery and equipment 2-14 years• Other property,plant and equipment 1-20 yearsLand is not depreciated.The depreciation base is determined takinginto account the scrap value of the asset andwith reduction of any depreciation. Thescrap value is determined at the time ofacquisition and is re-valued annually. If thescrap value exceeds the carrying amount ofthe asset, depreciation will cease. Thecarrying values of plant and equipment aretested for impairment when events orchanges in circumstances indicate that thecarrying value may not be recoverable. Anitem of property, plant and equipment isderecognised upon disposal or when nofuture economic benefits are expected fromits use or disposal. Any gain or loss arising onderecognition of the asset (calculated as thedifference between the net disposalproceeds and the carrying amount of theasset) is recognised in the income statementin the year the asset is derecognised. Theasset’s residual values, useful lives andmethods are reviewed - and adjusted ifappropriate - at every financial year-end.When each major inspection is performed,its cost is recognised in the carrying amountof the plant and equipment as a replacementif the recognition criteria are satisfied.ImpairmentIf an asset does not generate cash flows thatare largely independent of cash flows fromother assets, an enterprise should determinethe recoverable amount of the cash-generatingunit. A cash-generating unit is the smallestidentifiable group of assets for whichidentifiable cash flows can be identified andmeasured. Nycomed considers the totalbusiness to be one cash-generating unit asthe cash flows from individual brands,products, other assets or geographicalsegments are not clearly identifiable. As such,Nycomed tests impairment at Group level.Impairment of goodwill is determined byassessing the recoverable amount of thecash-generating unit to which the goodwillrelates. Where the recoverable amount of thecash-generating unit is less than the carryingamount, an impairment loss is recognised.An impairment test is conducted in respectof the book value of intangible, tangibleand financial assets, and where write-downsare required, the book value is written downto the higher of net realisable value and thepresent value of future cash flows inconnection with continued use. Consequently,intangible and tangible assets are writtendown in the income statement in those caseswhere the book value exceeds the expectedfuture cash flow from the undertaking or theassets to which the goodwill is related.The book value of financial assets is writtendown if, as a result of a change in theexpected cash flows, the expected presentvalue of such cash flows is lower than thecarrying value. When computing the presentvalue, the original effective rate of interest isapplied. If, subsequently, the present value ofwritten-down financial assets increases, thewrite-down is reversed. Such reversal ofprevious impairments will not result infinancial assets being measured at more thanthe amortised cost.

36 Nycomed Annual Report 2008Financial Statements>Investments and otherfinancial assetsFinancial assets in the scope of IAS 39 areclassified as either financial assets at fairvalue through profit or loss, loans andreceivables, held-to-maturity investments,or available-for-sale financial assets, asappropriate. When financial assets arerecognised initially, they are measured at fairvalue, plus, in the case of investments not atfair value through profit or loss, directlyattributable transaction costs. The Groupdetermines the classification of its financialassets after initial recognition and, whereallowed and appropriate, re-evaluates thisdesignation at every financial year-end.All regular way purchases and sales offinancial assets are recognised on the tradedate, i.e. the date that the Group commitsto purchase the asset. Regular way purchasesor sales are purchases or sales of financialassets that require delivery of assets withinthe period generally established byregulation or convention in the marketplace.Financial assets at fair valuethrough profit and lossFinancial assets classified as held for tradingare included in the category “financial assetsat fair value through profit or loss”. Financialassets are classified as held for trading if theyare acquired for the purpose of selling in thenear term. Derivatives are also classified asheld for trading unless they are designatedas effective hedging instruments. Gains orlosses on investments held for trading arerecognised in the income statement.Loans and receivablesLoans and receivables are non-derivativefinancial assets with fixed or determinablepayments that are not quoted in an activemarket. Such assets are carried at amortisedcost using the effective interest method.Gains and losses are recognised in theincome statement when the loans andreceivables are derecognised or impaired, aswell as through the amortisation process.Available-for-sale financialassetsAvailable-for-sale financial assets are thosenon-derivative financial assets that aredesignated as available for sale or are notclassified in any of the two precedingcategories. After initial recognition, availablefor-salefinancial assets are measured at fairvalue with gains or losses being recognisedas a separate component of equity until theinvestment is derecognised or until theinvestment is determined to be impaired.In this case, the cumulative gain or losspreviously reported in equity is recognisedin the income statement. The fair value ofinvestments that are actively traded inorganised financial markets is determinedby reference to quoted market bid prices atthe close of business on the balance sheetdate. For investments where there is no activemarket, fair value is determined usingvaluation techniques. Such techniques includeusing recent arm’s length market transactions,reference to the current market value ofanother instrument (which is substantially thesame), discounted cash flow analysis, andoption pricing models.InventoriesInventories are measured at the lower ofcost in accordance with the weightedaverage price method and the net realisablevalue. The net realisable value is made upof the expected sales price, including aprovision for obsolescence, less anyremaining production and sales costs.The cost of manufactured, finished and semifinishedproducts includes the cost of rawmaterials, direct labour, other productionmaterials and production overheads.Production overheads include indirect labourand materials, repair, maintenance anddepreciation costs related to machinery andbuildings used in the production process,and costs related to production administrationand management.Goods for resale include the purchase priceand related transportation costs.Trade and other receivablesTrade receivables are recognised and carriedat original invoice amount less an allowancefor any uncollectible amounts. Allowancesare made on the basis of probability ofdefault.Cash and cash equivalentsCash and short-term deposits in the balancesheet comprise cash at banks and in-handand short-term deposits, with an originalmaturity of three months or less.Treasury sharesOwn equity instruments which arereacquired (treasury shares) are deductedfrom equity. No gain or loss is recognisedin profit or loss on the purchase, sale, issueor cancellation of the Group’s own equityinstruments.Interest-bearing loans andborrowingsAll loans and borrowings are initiallyrecognised at the fair value of theconsideration received, less directlyattributable transaction costs. After initialrecognition, interest-bearing loans andborrowings are measured at amortised costusing the effective interest method. Gainsand losses are recognised in net profit orloss when the liabilities are derecognised,as well as through the amortisation process.TaxesCurrent taxCurrent tax assets and liabilities for thecurrent and prior periods are measured atthe amount expected to be recovered fromor paid to the tax authorities. The tax ratesand tax laws used to compute the amountare those that are enacted or substantivelyenacted at the balance sheet date.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 37Deferred taxDeferred income tax is provided, using theliability method, on temporary differences atthe balance sheet date between the tax basesof assets and liabilities and their carryingamounts for financial reporting purposes.Deferred tax liabilities are recognised forall taxable temporary differences, except• where the deferred tax liability arises fromthe initial recognition of goodwill or of anasset or liability in a transaction that is nota business combination and, at the time ofthe transaction, affects neither theaccounting profit nor taxable profit or loss;• in respect of taxable temporarydifferences associated with investments insubsidiaries, associates and interests injoint ventures, where the timing of thereversal of the temporary differences canbe controlled and it is probable that thetemporary differences will not reverse inthe foreseeable future.Deferred income tax assets are recognisedfor all deductible temporary differences,carry-forward of unused tax credits andunused tax losses, to the extent that it isprobable that taxable profit will be availableagainst which the deductible temporarydifferences, and the carry-forward of unusedtax credits and unused tax losses, can beutilised, except• where the deferred income tax assetrelating to the deductible temporarydifference arises from the initialrecognition of an asset or liability in atransaction that is not a businesscombination and, at the time of thetransaction, affects neither the accountingprofit nor taxable profit or loss;• in respect of deductible temporarydifferences associated with investmentsin subsidiaries, associates and interests injoint ventures, deferred tax assets arerecognised only to the extent that it isprobable that the temporary differenceswill reverse in the foreseeable future andtaxable profit will be available againstwhich the temporary differences can beutilised.The carrying amount of deferred incometax assets is reviewed at each balance sheetdate and reduced to the extent that it is nolonger probable that sufficient taxable profitwill be available to allow all or part of thedeferred income tax asset to be utilised.Unrecognised deferred income tax assets arereassessed at each balance sheet date andare recognised to the extent that it hasbecome probable that future taxable profitwill allow the deferred tax asset to berecovered.Deferred income tax assets and liabilities aremeasured at the tax rates that are expectedto apply to the year when the asset isrealised or the liability is settled, based ontax rates (and tax laws) that have beenenacted or substantively enacted at thebalance sheet date. Income tax relating toitems recognised directly in equity isrecognised in equity and not in the incomestatement.Deferred tax assets and deferred taxliabilities are offset, if a legally enforceableright exists to set off current tax assetsagainst current tax liabilities and thedeferred taxes relate to the same taxableentity and the same tax authority.Sales taxRevenues, expenses and assets arerecognised net of the amount of sales tax,except• where the sales tax incurred on a purchaseof assets or services is not recoverablefrom the tax authority, in which case thesales tax is recognised as part of the costof acquisition of the asset or as part of theexpense item as applicable;• receivables and payables that are statedwith the amount of sales tax included.The net amount of sales tax recoverablefrom, or payable to, the tax authority isincluded as part of receivables or payablesin the balance sheet.DividendsThe proposed dividend for the year is shownas a separate item within shareholders’equity.Employee benefits and pensionsWages, salaries, social security contributions,paid annual leave and sick leave, bonuses,and non-monetary benefits are accrued inthe year in which the associated services arerendered by employees of the Group.Pension provisionsThe Group operates a number of definedbenefit and defined contribution plans in thesubsidiaries.The costs for the year for defined benefitplans are determined using the projectedunit credit method. This reflects servicesrendered by employees to the dates ofvaluation and is based on actuarialassumptions primarily regarding discountrates used in determining the present valueof benefits, projected rates of remunerationgrowth, and long-term expected rates ofreturn for plan assets.The impact from differences betweenassumptions and actual events, and effectsof changes in actuarial assumptions (actuarialgains/losses) are recognised in the periodthey occur and charged to equity.The defined benefit liability is the aggregateof the present value of the defined benefitobligation, including recognition of allactuarial gains and losses and the fair valueof plan assets out of which the obligationsare to be settled directly.The Group’s contributions to the definedcontribution plans are charged to the incomestatement in the year to which they relate.

38 Nycomed Annual Report 2008Financial Statements>Share-based paymenttransactionsNycomed operates equity-settled, sharebasedcompensation plans.The cost of equity-settled transactionswith employees is measured by reference tothe fair value at grant date, measured byBlack & Scholes. The cost of equity-settledtransactions is recognised, together with acorresponding increase in equity, over theperiod in which any performance and/orservice conditions are fulfilled, ending onthe date on which the relevant employeesbecome fully entitled to the award (‘thevesting date’). If there are no vestingconditions, the fair value is expensed in fullat grant date. No expense is recognised forawards that do not ultimately vest, exceptfor awards where vesting is conditional upona market condition, which are treated asvesting irrespective of whether or not themarket condition is satisfied, provided thatall other performance conditions aresatisfied.ProvisionsProvisions are recognised when the Grouphas a present obligation (legal or constructive)as a result of a past event occurring beforeor at the balance sheet date. It is probablethat an outflow of resources embodyingeconomic benefits will be required to settlethe obligation and a reliable estimate canbe made of the amount of the obligation.Current debtGenerally, other liabilities, which also includetrade payables, amounts owed to Groupenterprises and associated enterprises andother liabilities, are measured at amortisedcost unless specifically mentioned otherwise.Financial instrumentsThe Group uses derivative financialinstruments, such as forward currencycontracts and interest rate swaps, tohedge its risks associated with interest rateand foreign currency fluctuations. Suchderivative financial instruments are initiallymeasured at fair value on the date onwhich a derivative contract is enteredinto and are subsequently remeasuredat fair value. Derivatives are included inother receivables when the fair value ispositive and in other payables when thefair value is negative.Any gains or losses arising from changes infair value on derivatives that do not qualifyfor hedge accounting are recognised in netprofit or loss for the year. The fair value offorward currency contracts is calculated byreference to current forward exchange ratesfor contracts with similar maturity profiles.The fair value of interest rate swap contractsis determined by reference to market valuesfor similar instruments. In general, Nycomeddoes not apply hedge accounting underthe specific rules of IAS 39 to forwardexchange contracts and other derivativefinancial instruments except interest rateswaps applied to maintain a reasonablebalance between fixed and floating interestrate risk.Hedges of a net investmentHedges of a net investment in a foreignoperation, including a hedge of a monetaryitem that is accounted for as part of thenet investment, are treated as follows:• Gains or losses on the hedging instrumentrelating to the effective portion of the hedgeare recognised directly in equity, while anygains or losses relating to the ineffectiveportion are recognised in profit or loss• On disposal of the foreign operation,the cumulative value of any such gains orlosses recognised directly in equity istransferred to profit or loss.Consolidated cash flow statementThe consolidated cash flow statement isprepared using the indirect method. Thecash flow statement shows the consolidatedcash flow for the year and the net cashposition at the end of the year. The cashflow relates to three main activities:operating, investing and financing activities.Cash flow from operatingactivitiesCash flow from operating activities iscalculated as the operating income or loss,adjusted for non-cash items, plus changesin working capital, less taxes paid andinterest paid or received. Working capitalconsists of current assets, excluding itemsincluded in net cash; and current liabilities,excluding items included in net cash; anddebt to financial institutions, taxes anddividends.Cash flow from investingactivitiesCash flow from investing activitiescomprises the purchases and sales ofnon-current assets including investmentsin enterprises. The purchase prices aremeasured at cost, including distributionrights and goodwill.Cash flow from financingactivitiesCash flow from financing activitiescomprises payments to and fromshareholders, the raising and repaymentof debt to financial institutions, and otherlong-term and current liabilities notincluded in the working capital or innet cash.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200839Nycomed S.C.A. SICARConsolidated income statement1 January - 31 December 200801.01.2008 01.01.200731.12.2008 31.12.2007Note € thousand € thousandNet sales 3,191,763 3,450,250Royalties /Other Income 156,241 47,165Net turnover 3,348,004 3,497,4152 Cost of sales -880,921 -906,619Amortisation of fair value adjustments on inventories from acquisitions -3,636 -52,970Total cost of sales -884,557 -959,589gROSS PROFIT 2,463,447 2,537,826Sales and marketing expenses -916,170 -934,535Amortisation of fair value adjustments on patents and rights from acquisitions -646,000 -531,8192 Total sales and marketing expenses -1,562,170 -1,466,3542 Research and development expenses -224,733 -284,5512 Administrative expenses -257,156 -259,1322 Integration/restructuring cost -67,350 -173,975opeRATING INCOME 352,040 353,8143 Financial income 279,010 348,9354 Financial expenses -754,632 -425,417iNCOME/LOSS BEFORE TAX -123,582 277,3325 Income tax 45,654 -41,908NET RESULT OF THE PERiod -77,928 235,424Attributable to:Minority interest -2,058 6,404Equity holders of the parent -75,870 229,020-77,928 235,424

40 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARConsolidated balance sheet 31 December 200801.01.2008 01.01.200731.12.2008 31.12.2007Note ASSETS € thousand € thousandNon-current assets7 Patents, rights and currently marketed products 2,955,903 3,300,9237 Goodwill 2,158,971 2,074,5637 Development projects in progress and prepayments for intangibles 487,278 574,825total intangibles 5,602,152 5,950,3118 Land and buildings 312,780 343,5018 Machinery and equipment 171,549 189,4228 Other property, plant and equipment 114,418 121,5808 Assets under construction and prepayments for assets 25,090 30,947total property, plant and equipment 623,837 685,450Other investments in shares and bonds 31,716 14,040Other receivables 7,676 10,587other financial assets 39,392 24,62711 Deferred tax assets 96,516 116,926totAL NON-CURRENT Assets 6,361,897 6,777,314current assets14 Total inventories 434,922 401,43319 Trade receivables 578,669 587,41513 Income tax receivable 18,040 24,185Other receivables and prepayments 70,178 88,203total receivables 666,887 699,803Marketable securities 11,886 27,900Cash 496,704 484,232total cash and cash equivalents 508,590 512,132totAL CURRENT ASSETS 1,610,399 1,613,368totAL ASSETS 7,972,296 8,390,682Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 41Nycomed S.C.A. SICARConsolidated balance sheet 31 December 200801.01.2008 01.01.200731.12.2008 31.12.2007Note EQUITY AND LIABILITIES € thousand € thousand9 Capital stock 16,646 16,6779 Reserves 1,269,773 1,326,3861,286,419 1,343,063Minority interest 34,883 37,553totAL STOCKHOLDERS´ EQUITY 1,321,302 1,380,616Non-current liabilities10 Pension commitments 288,081 288,94611 Deferred tax 970,054 1,255,86012 Provisions 60,099 51,872Deferred income and other non-current liabilities 7,217 7,31818 Financial institutions 4,274,750 4,483,662totAL NON-CURRENT LIAbilities 5,600,201 6,087,658current liabilities18 Financial institutions 237,776 201,406Trade payables 265,033 267,15913 Income tax payable 49,809 16,61212 Provisions 209,497 222,536Other payables 203,531 84,069Deferred income 85,147 130,626totAL CURRENT LIAbilities 1,050,793 922,408totAL LIABILITIES 6,650,994 7,010,066totAL EQUITY AND LIAbilities 7,972,296 8,390,68215 Contingent liabilities, guarantee commitments, etc.16 Employee costs17 Risk management18 Financial risk and derivative financial instruments19 Trade receivables20 Capital management21 Related party transactions22 Auditors fee23 Non-cash adjustments24 Repayment of long-term bank debt25 Interest paid26 Subsequent events

42 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICAREquityCapitalstock Reserves Minority Total(note 9) (note 9) Total interest equitystATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY € thousand € thousand € thousand € thousand € thousandstockholders’ equity as of 1 January 2007 16,677 1,178,480 1,195,157 37,279 1,232,436Share Based Payments (note 16) - 876 876 29 906Effect of changes in minority share and investors’ contribution - 3,763 3,763 -3,763 -16,677 1,183,119 1,199,796 33,547 1,233,342Unrealised result on cash flow hedging, interest rate swaps - -4,194 -4,194 -117 -4,311Unrealised gain/loss on investments available for sale - -317 -317 -9 -326Change in actuarial gains and losses (note 10) - 33,617 33,617 940 34,557Tax of direct equity postings - 9,257 9,257 259 9,516Other direct equity postings - -1,411 -1,411 -2,313 -3,724Foreign currency translation - -122,705 -122,705 -1,157 -123,862total other expenses for the year recognised directly in equity - -85,753 -85,753 -2,397 -88,150Profit for the year - 229,020 229,020 6,404 235,424Total income for the year - 143,267 143,267 4,007 147,274stockholders’ equity as of 31 December 2007 16,677 1,326,386 1,343,063 37,553 1,380,616stockholders’ equity as of 1 January 2008 16,677 1,326,386 1,343,063 37,553 1,380,616Share-based payments (note 16) - 3,677 3,677 100 3,777Effect of changes in minority share and investors’ contribution - 1,104 1,104 -1,104 -Share cancellation (note 9) -31 - -31 - -3116,646 1,331,167 1,347,813 36,549 1,384,362Unrealised result on cash flow hedging, interest rate swaps - -9,688 -9,688 -263 -9,951Unrealised gain/loss on investments available for sale - -5,151 -5,151 -140 -5,291Change in actuarial gains and losses (note 10) - -5,964 -5,964 -161 -6,125Tax of direct equity postings - 2,425 2,425 65 2,490Other direct equity postings - 36,281 36,281 984 37,265Foreign currency translation - -3,427 -3,427 -93 -3,520total other income for the year recognised directly in equity - 14,476 14,476 392 14,868Loss for the year - -75,870 -75,870 -2,058 -77,928total loss for the year - -61,394 -61,394 -1,666 -63,060stockholders’ equity as of 31 December 2008 16,646 1,269,773 1,286,419 34,883 1,321,302Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 43Nycomed S.C.A. SICARConsolidated cash flow statement1 January-31 December 200801.01.2008 01.01.200731.12.2008 31.12.2007Note € thousand € thousandcash flow from operating activitiesOperating income 352,040 353,81423 Non-cash adjustments 740,236 695,827Change in working capital -111,776 24,509Financial income received 21,208 20,28525 Financial expenses paid -337,838 -395,06213 Income taxes received (paid) -169,141 -223,586Net cash flow from operating activities 494,729 475,787cash flow from investing activitiesAdjustment purchase price Altana Pharma AG - -50,138Acquisition fees paid - -18,3131 Acquisition Bradley Pharmaceuticals, Inc. -231,963 -1 Acquisition cost Bradley Pharmaceuticals, Inc. -7,112 -1 Net cash acquired Bradley Pharmaceuticals, Inc. 999 -7 Purchase of intangible assets -119,494 -111,5277 Disposal of intangible assets 1,968 14,3698 Purchase of tangible assets -56,295 -89,3668 Disposal of tangible assets 2,836 53,185Purchase of other investments - -2,388Net cash flow from (used in) investing activities -409,062 -204,178cash flow from financing activities24 Drawn restructuring facility - 125,00024 Repayment of long-term bank debt -248,261 -573,261Financing fees - -12,011Repayment of local bank borrowings -10,749 -Realised foreign exchange effect on the unwinding of cross-currency swaps 227,192 -Buyback of debt -33,884 -Net cash flow from (used in) financing activities -65,702 -460,272Net cash flow 19,965 -188,663Cash beginning of the period 484.232 677,794Currency translation adjustments -7,493 -4,899cash at 31 December 496,704 484,232

44 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes1. Business CombinationAcquisition of Bradley PharmaceuticalsOn 21 February 2008 Nycomed US Inc. acquired all the shares of Bradley Pharmaceuticals, Inc., “Bradley”, and its subsidiaries forUSD 349.6 million. Bradley was a company focused on niche therapeutic markets in the United States. With this acquisition, Nycomedwill expand the line of dermatological products currently offered through its PharmaDerm Division and thereby increase marketcoverage and drive future growth.Nycomed has not adopted IFRS 3R as it has not been approved by the EU early and as such, the Bradley acquisition is accounted for under IFRS 3Business Combinations. IFRS 3 requires the allocation of the cost of an acquisition to identifiable assets, liabilities and contingent liabilitiesto be completed.The Company considered the following approaches when estimating the Fair Value (FV) of the assets and liabilities acquired: the IncomeApproach, the Market Approach and the Cost Approach.• The Income Approach indicates the FV of an asset based on the projected annual cash flows that the subject asset can be expected togenerate over its remaining useful life. The projected annual cash flows are then discounted to a present value equivalent by applying arate of return appropriate to the risk of the asset;• The Market Approach estimates the FV of an asset by comparing it to market transactions of other similar assets. The time of sale,physical characteristics, conditions of sale, location and other factors are considered for the comparable asset. The market price of thecomparable asset is then adjusted to indicate the FV of the subject asset;• The Cost Approach is based on the theory that a prudent investor would pay no more for an asset than the amount for which the assetcould be replaced. To the extent the asset being valued provides less utility than the new asset, the replacement cost is reduced for suchfactors as physical deterioration and functional or economic obsolescence.The selection of the appropriate valuation approach is based on the nature and specific characteristics of the underlying asset or liabilitythat is valued.For the valuation of the assets acquired in relation to the acquisition of Bradley, the income approach was applied by considering anappropriate discount rate. This was computed by considering an industry-based weighted average cost of capital and the Internal Rate ofReturn implied by the fair value of the Operating Business Enterprise Value of Bradley.As Bradley prepared their financial statements according to accounting principles generally accepted in the United States, it would beimpractical to disclose the carrying amounts of the Bradley assets and liabilities at acquisition date on an IFRS basis as required per IFRS 3.67.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 45The fair value of identifiable assets, liabilities and contingent liabilities at the date of acquisition were:Recognised on Fair value Carryingacquisition adjustment amountAcquisition of Bradley Pharmaceuticals Inc. € million € million € millionGoodwill Bradley Pharmaceuticals Inc. - -18.8 18.8Patent and rights Bradley Pharmaceuticals Inc. 62.0 -42.9 104.9Patents and rights 113.8 113.8 -In-process Research & Development 7.2 7.2 -Property and equipment, net - -0.1 0.1Inventories 4.2 -1.3 5.5Other assets and prepaids 2.0 -0.8 2.8Trade receivables 7.9 2.2 5.7Deferred tax asset 14.9 3.8 11.1Prepaid taxes 1.5 -2.5 4.0Auction rate bonds 5.2 -0.3 5.5Cash 1.0 - 1.0total assets 219.7 60.3 159.4Accruals 47.5 9.8 37.6Accounts payable 2.9 -0.1 3.0Deferred tax liability 25.4 24.5 0.9total liabilities 75.7 34.2 41.5fair value of net assets 144.0 26.1 117.9Goodwill arising on acquisition 95.1purchase price 239.1The cost of the acquisition was €239,1 million and comprises:Net cash 232.0Acquisition costs 7.1239.1Identifiable intangible assets were valued using the income approach. An amount of € 183.0 million was allocated primarily to existing products.The Company is amortising the existing products over 4-10 years. The excess of cost over fair value of net tangible and intangible assetsamounted to € 95.1 million and was allocated to goodwill. The goodwill recognised on the acquisition is primarily attributable to the synergiesexpected to be achieved from the integration of Bradley into the existing business divisions. The synergies include reduction in combined salesforce expense, reduction in general and administration expenses and revenue upside by exploiting the opportunity to cross sell products.The results of operations of Bradley were included in the financial statements of Nycomed commencing 22 February 2008. Subsequent to theacquisition, Nycomed US Inc. merged Bradley and its subsidiaries into the Nycomed US Inc. legal entity. In addition, Bradley products have beenmanaged as part of Nycomed US Inc. existing divisions and as such, Bradley results are not accounted for separately from Nycomed US Inc.therefore, disclosure of Bradley results post acquisition is not feasible.The acquisition of Bradley and the related application of purchase accounting adjustments and financing transactions have affected and willcontinue to affect our results of operations following the acquisition.If the acquisition had occurred on 1 January 2008, management estimates that revenue for the period ending 31 December 2008 would havebeen € 11 million higher whereas the result of the period would have been lower by € 5.7 million respectively.

46 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotesAcquisition of Altana Pharma AGOn 29 December 2006 Nycomed A/S acquired all the shares in Altana Pharma AG for € 4,768 million. The business acquired is apharmaceutical company and provides innovative pharmaceutical products with a focus on prescription drugs for gastrointestinal andrespiratory diseases.In accordance with IFRS 3 Business Combinations, the purchase price allocation between identifiable assets, liabilities and contingentliabilities was completed within a period of twelve months after the acquisition date (29 December 2006).The final fair values of indentifiable assets and liabilities at the date of acquisition were:Recognised on Fair valueacquisition adjustment Carrying(restated) (restated) amount€ million € million € millionPatents and rights 3,009.5 3,009.5 -In-process Research & Development 275.0 275.0 -Intangible assets, recorded by Altana Pharma AG - -151.9 151.9Contract manufacturing 18.2 18.2 -Chemical library 25.0 25.0 -Property, plant and equipment 548.3 17.0 531.3Marketable securities 20.0 - 20.0Inventories 269.2 49.4 219.8Long term investment 8.5 - 8.5Other non-current assets 24.9 - 24.9Trade receivables 355.0 - 355.0Deferred tax assets 92.5 - 92.5Other current assets 60.9 - 60.9Cash 580.5 - 580.5total assets 5,287.4 3,242.1 2,045.2Pension provisions 259.8 - 259.8Deferred tax on fair value adjustments 1,134.7 1,134.7 -Current and non-current liabilities 597.7 - 597.7total liabilities 1,992.2 1,134.7 857.5fair value of net assets 3,295.2 2,107.4 1,187.8Goodwill arising on acquisition 1,473.4Purchase price 4,768.6The cost of the acquisition was €4,768 million and comprises:Net cash 4,689.8Purchase price adjustment accrued 49.7Acquisition costs 29.14,768.6Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200847Acquisitions after the balance sheet dateNycomed is a venturer in a South African company named Nycomed Madaus Pty, Ltd. It holds 50% shares in the company.On 18 December 2008, Nycomed signed the contract for the acquisition of the remaining 50% of the shares in Nycomed Madaus Pty, Ltd,a company engaged in the commercialisation of pharmaceutical products in the territory of South Africa, Swaziland, Lesotho, Namibia,Botswana and Indian Ocean Islands and other countries.The agreement is subject to the suspensive condition of the approval of the South African Competition Authorities which is due by 1 June2009. As at 31 December 2008 Nycomed has not taken over full control of the entity. As at this date, Nycomed Madaus Pty, Ltd is stillconsolidated at 50% as Nycomed has not taken full control of the entity yet.If the Competition Authorities of South Africa approve the acquisition, Nycomed has agreed to pay the seller an aggregate amount equalto the sum of:a) € 6.3 millionb) an amount equal to 50% of the aggregate cash assets of the company on the Closing Date less an amount calculated as the product of50% of the cash assets and the applicable rate of secondary tax on companies (“the net cash payment”).The acquisition of Nycomed Madaus Pty, Ltd will not result in any disposal of current operations.Due to the fact that the acquisition has only recently been agreed and it is subject to suspensive conditions, it is not possible toincorporate the following disclosures:1) the amount recognised at acquisition date for each class of acquirees’ assets, liabilities and contingent liabilities, and the carryingamounts of each of those classes, determined in accordance with IFRS, immediately before the combination2) a description of the factors that contributed to a cost that results in the recognition of goodwill3) a description of each intangible asset that was not recognised separately from goodwill and an explanation of why the intangibleasset´s fair value could not be measured reliably4) the amount of the Nycomed Madaus Pty´s profit or loss since the acquisition date included in the Nycomed´s profit or loss for theperiod.

48 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes2. Amortisation/depreciation of fixed assets01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandAmortisation/depreciation and write down of fixed assets is included in the total expenses of the group at the following amounts:Cost of sales 40,802 33,133Sales and marketing expenses 703,317 564,835Research and development expenses 14,041 19,748Administrative expenses 26,317 25,585Integration costs 6,207 -total 790,684 643,3013. Financial incomeInterest income from bank deposits 21,208 20,135Realised gains on financial assets or financial liabilities at fair value through profit or loss 227,192 396Unrealised gains on financial assets or financial liabilities-hedge accounting - 16,978Unrealised gain from debt buy back 20,935 -Unrealised currency exchange gains - 309,288Realised currency exchange gains 8,501 -Other financial income 1,174 2,138total 279,010 348,935All derivatives at fair value through profit or loss other than designated and effective hedging instruments are classified as held-for-tradingfinancial instruments under IAS 39.4. Financial expensesInterest expenses on financial liabilities classified at amortised costs -347,778 -370,279Realised currency exchange losses - -23,600Unrealised currency exchange losses -267,903 -Unrealised losses on financial assets or financial liabilities at fair value through profit or loss -116,667 -Realised losses on financial assets or financial liabilities-hedge accounting -389 -Amortised financing fees -16,071 -25,883Other financial expenses -5,824 -5,655total -754,632 -425,417All derivatives at fair value through profit or loss except designated and effective hedging instruments are classified as held-for-trading financialinstruments under IAS 39.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 495. Income tax01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandAccrued income tax for the year -247,788 -166,642Adjustment of deferred tax for the year 284,147 156,014Adjustment prior years (accrued tax) 28,907 -1,753Adjustment prior years (deferred tax) -19,612 -29,527total 45,654 -41,908income tax related to items posted directly to equityPension commitments 2,163 -12,512Unrealised result on cash flow hedging, interest rate swaps, etc. 3,581 5,875Adjustment of value of intangibles - 16,153Other -3,254 -Total 2,490 9,516Analysis of income tax:Income before tax -123,582 277,332Calculated 29.63% of income before tax 36,617 -61,013Non-deductible interest expenses -5,390 -17,022Non-deductible amortisation of goodwill 607 -1,581Non-deductible expenses related to warrant programme -1,058 -254Other non-deductible expenses -9,452 -9,330Withholding tax, tax on dividends and non-deductible loss on sale of shares -12,966 -19,061Impact of changes in tax rates 5,839 134,473Tax credits 6,353 13,206Other 10,570 -10,354Higher (lower) tax rates in foreign subsidiaries 5,239 -39,692Adjustment of tax concerning prior years 9,295 -31,280total - effective income tax rate 28.3% (2007: 15.1%) 45,654 -41,9086. EBITDA/Adjusted EBITDANet income (loss) -77,928 235,424Adjustments:Net financial items 475,622 76,482Income tax expense (benefit) -45,654 41,908Depreciation and amortisation 790,684 643,301EBITDA 1,142,724 997,115Adjustments:Integration/restructuring costs (exclude depreciation, already in EBITDA) 61,143 173,975Inventory step up - 50,243Warrants 3,777 906Adjusted EBITDA 1,207,644 1,222,239

50 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes7. IntangiblesPatentsDevelopmentrightsprojects in progressand currentlyand prepaymentmarketed products Goodwill for intangibles Totalcost as at 1 January 2007 4,023,757 2,115,654 521,670 6,661,081Currency retranslation effect -45,677 -34,841 -404 -80,922Additions in the year 52,847 - 58,680 111,527Disposal in the year -22,528 - -5,121 -27,649cost as of 31 December 2007 4,008,399 2,080,813 574,825 6,664,037Amortisations as of 1 January 2007 163,777 - - 163,777Amortisation for the period 549,953 6,250 - 556,203Disposal in the year -6,254 - - -6,254Amortisations as of 31 December 2007 707,476 6,250 - 713,726carrying value as of 31 December 2007 3,300,923 2,074,563 574,825 5,950,311cost as of 1 January 2008 4,008,399 2,080,813 574,825 6,664,037Currency retranslation effect -52,555 -10,693 2,172 -61,076Additions in the year 37,368 - 82,126 119,494Additions from acquisition of subsidiaries 175,753 95,101 7,181 278,035Disposal in the year -3,936 - -136 -4,072Transfers / corrections 96,369 -6,250 -81,604 8,515cost as of 31 December 2008 4,261,398 2,158,971 584,564 7,004,933Amortisations as of 1 January 2008 707,476 6,250 - 713,726Currency retranslation effect -1,156 - 115 -1,041Amortisation for the period 597,701 - - 597,701Impairment for the period 7,387 - 92,171 99,558Disposal in the year -913 - - -913Transfers / corrections -5,000 -6,250 5,000 -6,250Amortisations as of 31 December 2008 1,305,495 - 97,286 1,402,781carrying value as of 31 December 2008 2,955,903 2,158,971 487,278 5,602,152Amortisation period 2–21 years - -Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200851Additions to intangible assets, amount to € 119 million. The most significant are:Daxas® development expenses• Immunomedics in-licensing€ 29.5 million (R&D)€ 25.6 million (R&D)Additions from acquisition of subsidiaries are intangible assets acquired in connection with the acquisition of Bradley PharmaceuticalsInc., for additional detail please refer to Note 1 Business Combinations.Nycomed recognised impairment losses of which the most significant one is on the development product venticute € 56.6 million,due to negative results from clinical trials.Impairment TestAs a result of the impairment tests and the internal valuations of the business as a whole there is no basis for recognising impairment losson goodwill or other intangibles. Impairment tests are conducted at least annually and in connection with Management´s strategy review.In the impairment tests, the discounted values of future cash flows are compared against the carrying amounts. Future cash flows are basedon the budget for 2009, strategic plans for the years 2010-2013 and projections for the following years. Important parameters are sales,EBIT, working capital and growth assumptions subsequent to the budget and strategic plan period. Budget and strategic plans build onspecific commercial assessments of the business entities and the relevant products while projections that go beyond 2013 build on generalparameters for growth rates. For discounted cash flow calculations a discount rate of 7.2% (2007: 8.8%) has been applied.With regard to the assessment of value-in-use of the capitalised assets, management believes that no reasonably possible change in any ofthe key assumptions would cause the carrying value of the assets to materially exceed its recoverable amount.The carrying value of goodwill is made up of balances arising on acquisition of the following companies:01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandNycomed A/S 642,237 642,237Altana Pharma AG 1,407,608 1,432,326Bradley Pharmaceuticals Inc. 109,126 -Carrying values as of 31 December 2008 2,158,971 2,074,5632008 Remainingcarrying amortisationamountperiodsignificant intangible assets description € thousandIntangible assets arising from the acquisition of Altana Pharma AG Products, marketing and distribution rights 2,049,577 1-19 yearsIntangible assets arising from the acquisition of Nycomed A/S Products, marketing and distribution rights 715,712 6-9 years

52 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes8. Property, plant and equipmentAssetsOtherunderLand Machinery property constructionand and plant and and prepaymentsbuildings equipment equipment for assets Totalcost as at 1 January 2007 389,888 218,217 138,329 12,359 758,793Currency retranslation effect -1,220 -575 -1,700 -900 -4,395Additions in the year 6,041 19,758 23,409 40,158 89,366Disposals in the year -28,777 -14,283 -32,527 -430 -76,017Transfers 163 10,718 4,556 -20,240 -4,803cost as at 31 December 2007 366,095 233,835 132,067 30,947 762,944depreciations as of 1 January 2007 9,358 17,330 -4,202 - 22,486Currency retranslation effect -305 -416 -800 - -1,521Depreciation for the year 16,107 33,629 37,362 - 87,098Disposals in the year -2,566 -6,130 -21,873 - -30,569depreciation as at 31 December 2007 22,594 44,413 10,487 - 77,494carrying value as at 31 December 2007 343,501 189,422 121,580 30,947 685,450cost as at 1 January 2008 366,095 233,835 132,067 30,947 762,944Currency retranslation effect -15,904 -15,923 -12,287 -508 -44,622Additions in the year 5,554 15,810 20,496 14,435 56,295Disposals in the year -1,824 -2,360 -13,109 -480 -17,773Transfers/corrections -7,187 11,692 14,529 -17,204 1,830cost as at 31 December 2008 346,734 243,054 141,696 27,190 758,674depreciations as of 1 January 2008 22,594 44,413 10,487 - 77,494Currency retranslation effect -5,094 -9,972 -9,454 14 -24,506Depreciation for the year 17,784 32,596 34,751 2,086 87,217Disposals in the year -1,109 -2,214 -11,576 - -14,899Impairment of the year 1,035 5,172 - - 6,207Transfers/corrections -1,256 1,510 3,070 - 3,324depreciation as at 31 December 2008 33,954 71,505 27,278 2,100 134,837carrying value as at 31 December 2008 312,780 171,549 114,418 25,090 623,837Amortisation period 5–50 years 2–14 years 1–20 years -Note 15 provides more details on security for loans, etc. as regards property, plant and equipment.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 200853Additions to property, plant and equipment, amounting to € 56 million.There were no significant additions in the reporting period.There were no significant disposals in the reporting period.In relation to the restructuring of the group operations, impairments of € 6.2 million were recorded in 2008:Nycomed Austria GmbH € 5.2 million mainly relating to the transfer of the API production to India and OY Leiras Finland AB € 1.0 millionrelating to the shutdown of the production facility in 2009.

54 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes9. ReservesForeigncurrencyShare Retained translation Other Totalpremium earnings reserve reserves reserves€ thousand € thousand € thousand € thousand € thousandAt 1 January 2007 1,383,869 -169,900 -5,320 7,110 1,215,759Share-based payments (note 16) - - - 906 906Unrealised result on cash flow hedging, interest rate swaps - - - -4,311 -4,311Unrealised gain/loss on investments held for sale - - - -326 -326Change in actuarial gains and losses (note 10) - - - 34,557 34,557Tax on equity postings - - - 9,516 9,516Other direct equity postings -3,724 -3,724Foreign currency translation - - -123,862 - -123,862Net profit for the year - 235,424 - - 235,424At 31 December 2007 1,383,869 65,524 -129,182 43,728 1,363,939Reserves attributable to equity holders of the parent 1,326,386Reserves attributable to minority interest 37,5531,363,939At 1 January 2008 1,383,869 65,524 -129,182 43,728 1,363,939Share-based payments (note 16) - - - 3,777 3,777Unrealised result on cash flow hedging, interest rate swaps - - - -9,951 -9,951Unrealised gain/loss on investments held for sale - - - -5,291 -5,291Change in actuarial gains and losses (note 10) - - - -6,125 -6,125Tax on equity postings - - - 2,490 2,490Other direct equity postings - - - 37,265 37,265Foreign currency translation - - -3,520 - -3,520Net profit/loss for the year - -77,928 - - -77,928At 31 December 2008 1,383,869 -12,404 -132,702 65,893 1,304,656Reserves attributable to equity holders of the parent 1,269,773Reserves attributable to minority interest 34,8831,304,656Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 559. Capital Stock01.01.2008 01.01.200731.12.2008 31.12.2007Number of shares issuedNumber of shares issued as of 1 January 13,341,371 13,341,371Ordinary shares cancellation -24,799 -Number of shares issued as of 31 December 13,316,572 13,341,37101.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandcapital stock valueNumber of shares issued as of 1 January 16,677 16,677Ordinary shares cancellation -31 -capital stock value as at 31 December 16,646 16,67710. Pension commitmentsMany employees in Nycomed are covered by retirement plans in the form of primarily defined contribution plans or alternatively definedbenefit plans. Nycomed entities sponsor these plans either directly or by contributing to independently administered funds. The nature ofsuch plans varies according to the legal regulations, fiscal requirements and economic conditions of the countries in which the employeesare employed, and the benefits are generally based on the employees´ remuneration and years of service. Defined benefit plans compriseNycomed subsidiaries in Norway, Austria, Switzerland, France, Germany, Belgium, Netherlands, Italy, USA, Canada and Mexico.Post-employment benefit plans are usually funded by payments from Nycomed entities and by employees to funds independent of theGroup. Where a plan is unfunded, a liability for the obligation is recognised in the balance sheet.The following tables summarise the components of net benefit expense recognised in the consolidated income statement and the fundedstatus and amounts recognised in the consolidated balance sheet for the respective plans.01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandCurrent service cost 16,132 17,722Interest cost on benefit obligation 19,857 17,517Expected return on plan assets -5,569 -2,324Past service cost 792 -Net benefit expense 31,212 32,915Actual return on plan assets -15,600 2,928Expected return on plan assets 5,569 2,324Defined benefit obligation at 31 December 374,185 386,156Fair value of plan assets at 31 December 86,104 97,210Recognised as pension obligation in balance sheet 288,081 288,946

56 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes10. Pension commitments, CONTINUED01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandChanges in the present value of the defined benefit obligation are as follows:Opening defined benefit obligation 386,156 378,711Interest cost 19,857 17,517Current service cost 16,132 17,722Past service cost 792 -Benefits paid -15,215 -15,019Actuarial (gains)/losses on obligation -15,044 -33,953Exchange differences on foreign plans -5,804 -1,192Reclassifications -13,452 18,565Participants’ contributions 963 373Curtailments in the year -73 -112Settlements in the year -128 3,544defined benefit obligation at 31 December 374,185 386,156changes in the fair value of plan assets are as follows:Opening fair value of plan assets 97,210 89,321Actuarial gain/loss in the year -21,169 604Expected return 5,569 2,324Contributions by employer 10,765 6,932Employees’ contribution in the year 963 373Benefits paid -2,648 -3,245Exchange differences on foreign plans -3,085 847Reclassifications -1,624 2,031Settlements in the year 123 -1,977fair value of plan assets at 31 December 86,104 97,210Information about major categories of plan assets as number of total plan assetsEquities 25,184 45,315Bonds 32,067 38,921Cash 1,442 -Property 4,796 4,879Other 22,615 8,095Total 86,104 97,210The actuarial assumptions used in the actuarial computations and valuations vary from country to country due to local economic and socialconditions. The weighted-average assumptions used are as follows:AssumptionsDiscount rate 5,7 5,5Expected rate of return on assets 6,5 6,6Future salary increases 4,0 4,1Future pension increases 1,5 1,6Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 57The weighted-average assumptions for the discount rate increased in 2008 by 0.2 in comparison with the prior year. All the rest of theindicators were reduced by 0.1.10. Pension commitments, CONTINUED2008 2007 2006 2005 *Amounts for the current and previous three periods are as follows: € thousand € thousand € thousand € thousandDefined benefit obligation 374,185 386,156 378,710 66,716Plan assets 86,104 97’210 89,321 35,272(Deficit/surplus) 288,081 288,946 289,389 31,444*2005 figures are not adjusted for Altana acquisition2008 2007Actuarial gain and losses recognised directly in equity € thousand € thousandCumulative amount at 1 January -11,925 -46,482Recognised during the period -6,125 34,557Cumulative amount at 31 December -18,050 -11,925

58 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes11. Deferred tax01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandProvision as of January 1 1,138,934 1,284,242Adjustment of deferred tax in subsidiaries acquired in 2006 - -16,975Deferred tax in subsidiaries acquired in 2008 10,996 -Deferred tax in subsidiaries disposed in 2007 - 1,623Reclassification deferred tax/accrued tax 755 4,823Currency retranslation effect -10,637 1,224Adjustment prior years 19,612 29,527Adjustment for the year -284,147 -156,014Deferred tax posted to equity -1,975 -9,516provision as of December 31 873,538 1,138,934deferred tax relates to:Intangibles 937,944 1,090,206Property, plant and equipment 36,700 40,875Financial fixed assets 8,423 1,512Current assets -42,032 -20,325Provisions -28,378 -35,212Non-current liabilities -28.663 -16,255Tax loss carry forwards -57,209 -35,438Unamortised financing costs 10,055 14,096Foreign exchange gains/losses 30,459 91,931Deferred income for tax purposes 6,239 7,544provision as of December 31 873,538 1,138,934Allocation of deferred tax:Deferred tax liabilities 970,054 1,255,860Deferred tax assets 96,516 116,926873,538 1,138,934Deferred tax assets mainly relates to tax loss carry forwards in the Danish and Norwegian companies and timing differences in theNorwegian and US subsidiaries.The Group has additional tax losses which arose in Denmark of € 235,059 thousand (2007: € 175,763 thousand) that are availableindefinitely for offset against future taxable profits of the Danish companies. Deferred tax assets have not been recognised in respect ofthese losses as they may not be used to offset taxable profits elsewhere in the Group and it is uncertain whether future taxable profits inDenmark will be sufficient to utilise this portion of the Danish tax losses in the foreseeable future.At 31 December 2008 a deferred tax liability of € 1,366 thousand (2007: € 1,445 thousand) was recognised for taxes that will be payableon the expected remittance of earnings of certain of the Group’s subsidiaries.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 5912. provisions01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandSales andEmployees marketing Warranty Other Restructuring Total 2008 Total 2007Provisions as of 1 January 97,608 57,570 3,363 68,445 47,421 274,407 222,828Currency retranslation effect -1,466 8,120 -457 3,465 795 10,457 -4,551Addition from acquisition of subsidiaries 53 785 - 166 1,398 2,402 -Arising during the year 90,018 45,810 3,063 50,760 11,231 200,882 257,533Utilised during the year -57,368 -50,258 -84 -37,784 -26,752 -172,246 -189,084Unused amount reserved -12,546 -10,295 -642 -15,601 -7,222 -46,306 -12,318other provisions as of 31 December 116,299 51,732 5,243 69,451 26,871 269,596 274,408Current 2008 75,314 51,732 1,377 61,439 19,635 209,497Non-current 2008 40,985 - 3,866 8,012 7,236 60,099116,299 51,732 5,243 69,451 26,871 269,596Current 2007 61,662 57,570 1,155 55,275 46,874 222,536Non-current 2007 35,947 - 2,208 13,170 547 51,87297,608 57,570 3,363 68,445 47,421 274,408The employee-related provisions encompass accruals for special bonuses, as well as anniversary and paid holidays. Provisions for sales andmarketing pertain primarily to sales bonuses and commissions. Provisions for warranty cover commitments in connection with goodsdelivered and services rendered.The items included in other provisions are primarily related to taxes other than income taxes, pending litigation, legal costs, professionalfees, clinical trials and research.

60 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes13. Income tax receivable/payable01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandProvision as of 1 January -7,573 54,958Transfer from other assets/liabilities at 1 January -2,750 -3,411Accrued tax in acquired subsidiaries acquired in 2008 -1,579 -Accrued tax in subsidiaries disposed in 2007 - 369Reclassification accrued tax/deferred tax -755 -4,823Currency retranslation effect -4,799 535Income taxes paid during the year -169,141 -223,596Adjustment prior years -28,907 1,753Accrued income tax for the year 247,788 166,642Accrued tax posted to equity -515 -Accrued as of 31 December 31,769 -7,573Allocation of income taxIncome tax payables 49,809 16,612Income tax receivables 18,040 24,18531,769 -7,57314. Inventories01.01.2008 01.01.200731.12.2008 31.12.2007Raw materials and packaging 99,109 104,210Semi-finished goods 92,079 76,529Finished goods 227,128 204,794Prepayment for goods 16,606 15,900total 434,922 401,433The amount of write-down of inventories recognised as an expense (recognised in cost of sales) during the period 13,379 11,512Amount of reversal of write-down of inventories during the year - 236In the period ended 31 December 2008, € 884.557 thousand of inventories were recognised as an expense in cost of sales(2007: € 959,589 thousand).Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 6115. Contingent liabilities, guarantee commitments, etc.Contractual obligationsThe Company rents and leases property, company cars and equipment used in its operations.These leases are classified as operating leases. The Group has no finance leases in 2008 and 2007. The lease contractsexpire on various dates in the future.Future minimum lease payments for non-cancellable operating and capital leases were:Operating leases01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandLease and rent commitments expiring withinthe following periods as from the balance sheet date:Within one year 31,886 25,726Between one and two years 23,725 29,341Between two and three years 17,406 21,861Between three and four years 9,872 14,982Between four and five years 6,012 11,288After five years 11,208 22,449Total 100,109 125,647The majority of the operating lease obligations represents rent or leasing of buildings in the United States and United Kingdom,which are partially counter-reflected in a provision for onerous contracts based on the restructuring decision for the US and the UK.commitments and guaranteesCommitments for capital expenditures and other purchase obligations 9,680 20,168total 9,680 20,168

62 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes15. Contingent liabilities, guarantee commitments, etc., continuedThe following legal entities are borrowers or guarantors under the Senior Facilities Agreement and therefore liable under that agreementfor the full or partial amount.Nyco Holdings 3 ApS, DenmarkNycomed Danmark ApS, DenmarkNycomed Germany Holding GmbH, GermanyNycomed AB, SwedenNycomed Holding GmbH, AustriaNycomed Christiaens B.V., The NetherlandsNycomed Christiaens SCA, BelgiumNycomed Holding ApS, DenmarkNyco Holdings 2 ApS, DenmarkNyco Holdings Belgium SPRL, BelgiumNycomed Pharma AS, NorwayNycomed Finland Holding OYNycomed Pharma Ltda., BrazilNycomed Belgium SCA/CVA, BelgiumNycomed Canada Inc., CanadaNycomed Asset Management, GermanyNycomed GmbH, GermanyUnipharma GmbH, GermanyNycomed S.A. de C.V., MexicoNycomed B.V., NetherlandsNycomed Pharma S.A., SpainNycomed US, Inc., USANycomed Norway Holding AS, NorwayNycomed Sweden Holding AB, SwedenNycomed Deutschland GmbH, GermanyNycomed France SAS, FranceSelskab No 26812305 APS, DenmarkExcept for Nyco Holdings 2 ApS the shares of these entities have been pledged in favour of the banks.The shares of the following additional legal entities are pledged to the banks: OY Leiras Finland AB, Nycomed Austria GmbH, AltanaPharma GmbH (Austria). Nycomed Danmark, Nycomed Pharma (Norway) and Nycomed Christiaens SCA (Belgium) have also grantedsecurity over receivables, registered bonds, floating charges over business equipment and inventory and real property. The Danish entitieshave also registered negative pledges in the personal register.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20086315. Contingent liabilities, guarantee commitments, etc., continuedThe total debt covered by guarantees as of 31 December 2008 is € 4,575,873 thousand (2007: € 4,751,351 thousand).The assets covered by these guarantees as of 31 December are set out below:01.01.2008 01.01.200731.12.2008 31.12.2007Asset Securities € thousand € thousandmortgage of property, plant and equipmentProperty mortgage over property in Norway (Nycomed Pharma AS) 18,945 24,666Property mortgage over property in Roskilde (Nycomed Danmark ApS) 21,363 22,407Pledge over plant and equipment in Norway (Nycomed Pharma AS) 13,705 15,855Property mortgage over property in Brazil (Nycomed Pharma Ltda.) 21,778 12,377Property mortgage over property in Konstanz (Nycomed GmbH) 119,119 126,151Pledge over plant and equipment in Mexico (Nycomed S.A. de C.V.) 6,275 7,853total 201,185 209,309securities over other current assetsPledge over inventory in Norway (Nycomed Pharma AS) 14,893 15,742Receivables in Belgium (Nycomed Christiaens SCA) 93,596 85,683Receivables in Norway (Nycomed Pharma AS) 11,106 13,782Deposits on specific bank accounts in Norway (Nycomed Pharma AS) 4,228 1,372Receivables in Austria under intra group agreement (Nyco Holdings 3 ApS) 245,127 249,815Pledge over registered bonds in Belgium 68,332 72,185Account Pledge (Nyco Holdings 2 ApS) 108 462total 437,390 439,042The above securities are to some extent limited to certain amounts. However the limitation generally exceeds the value of the assets sothat the limitation does not actually limit or reduce the security granted to the banks.Mortgages on the property St. Hede Roskilde Jorder 54, totaling € 33,554 thousand have been registered to the mortgagor and are held byNordea AB as security for bank debt.

64 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes15. Contingent liabilities, guarantee commitments, etc., continuedIn connection with the 2005 acquisition, certain contingent notes to the shareholders selling shares as part of the transaction have beenissued. The aggregate principal amount of the contingent notes will be an amount equal to 30% of the financial value to Nycomed of afinal judicial decision or settlement related to claims made by Nycomed against a certain third-party pharmaceutical company relating tothe alleged infringement by such third party of intellectual property rights relating to a particular substance/products, to which Nycomedhas exclusive rights pursuant to a development and license agreement. The contingent notes are not current obligations for Nycomed A/Sbut would become obligations of Nycomed A/S only upon the successful outcome of patent infringement proceedings that a subsidiary ofNyco Holdings ApS has commenced. The subsidiary has a contingent asset in this connection.ContingenciesFrom time to time the Group may be party to legal proceedings in the ordinary course of business. The Group decides from case to case,whether it will settle the matter or whether it will defend itself (due to the general or strategic importance of the case to the Group).Protonix ® sales in the United States in 2008 were adversely affected by the “at risk” launches of generic Pantoprazole by Teva and Sun.Nycomed believes the Protonix ® Compound Patent is strong and will continue to vigorously pursue its litigation against Teva, Sun andother infringing generics. Nycomed will seek to recover its lost profits and other damages resulting from the infringing sales of genericsproducts. In the opinion of management, the ultimate resolution of any threatened or pending litigation will not have a material effect onthe Group’s financial position or results of operations. The Group maintains liability insurance in an effort to reduce the impact of negativejudgements in legal matters.The Group has entered into long-term contracts for the purchase of raw materials for certain strategic products in order to secure supplies.Furthermore, certain of the Group´s in-licensing agreeements require purchase of minimum quantities.The Group has certain other contingent liabilities resulting from claims, performance guarantees and other commitments incident to theordinary course of business. Management believes that the probable resolution of any other contingencies will not materially impact thefinancial position or results of operations.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20086516. Employee cost01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandSalaries and wages, etc. are included in the group’s total expenses at the following amounts:Wages and salaries for the employees 565,253 559,134Pension 44,010 52,437Other social security costs 105,758 98,772Warrants 3,777 906total 718,798 711,249Salaries and wages etc. are included in the profit and loss statement as follows:Cost of sales 174,668 171,161Sales and marketing expenses 312,636 295,932Research and development expenses 104,985 124,267Administrative expenses 101,306 112,129Restructuring 25,203 7,759Total 718,798 711,249Average number of employees 11,695 11,917total number of employees 11,657 11,683For the definition of Group Management we refer to the Corporate Governance section in this Annual Report.The aggregate amount of salary, pension cost and compensation paid to the executive committee for the year was € 3,311 thousand(2007: € 2.934 thousand). A total bonus of € 1,228 thousand (2007: € 1,684 thousand) was paid out as well as a special bonus of € 1,036thousand (2007: € 2,264 thousand) mainly due to integration, incentive programmes and sign-on programmes. The aggregate amount ofsalary, pension costs and compensation paid to the CEO in 2007 was € 1,023 thousand (2007: € 876 thousand). In addition a bonus of€ 559 thousand (2007: € 499 thousand) was paid to the CEO.A fee of USD 50 thousand was paid to the Board in 2008 (2007: USD 90 thousand). The shareholders have authorised the Board to remu ner atethe directors with fees which cannot exceed USD 50 thousand per director per year. In 2008, one director of the Board received a fee.Termination payments to members of the Executive Committee amount to € 1,688 thousand in the year (2007: € 4,996 thousand).During 2008 Nycomed bought back 12,882 shares and 12,100 warrants from members of the management group that left the companyduring the year. The share price level for the shares in Nycomed A/S applied in connection with the 2006 acquisition has been estimatedat fair value using mark-to-model.In October 2008 Nycomed granted the executive management team and a group of other employees warrants corresponding to 1.0% ofthe current capital stock at the time of granting the warrants, in total 140,000 warrants. Each warrant corresponds to one share. The exerciseprice is based on the share price level for the shares in Nycomed A/S applied in connection with the 2006 acquisition plus € 20 per share.The warrants can be utilised in the period from the time of granting the warrants and the following 5.7 years. € 3,777 thousand wasexpensed in the income statement in 2008 for this programme. The market value for the warrants was calculated using the Black-Scholesoption pricing model. The main assumptions were as follows. Expected volatility of 34% has been calculated based on historical data forcomparable companies. The risk-free interest rate is 2.82% and the share price used has been estimated at fair value using mark-to-model.The expected life of the warrants has been set to 3 years and no expected dividend has been included in the calculation.

66 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes16. Employee cost, continuedDuring 2007 Nycomed bought back 54,847 shares and 28,360 warrants from members of the management group that left the companyduring the year. The share price level for the shares in Nycomed A/S applied in connection with the 2006 acquisition was estimated atfair value using mark-to-model.In December 2007 Nycomed granted the executive management team and a group of other employees warrants corresponding to 0.3% ofthe current capital stock at the time of granting the warrants, in total 41,600 warrants. Each warrant corresponds to one share. The exerciseprice is based on the share price level for the shares in Nycomed A/S applied in connection with the 2006 acquisition plus € 20 per share.The warrants can be utilised in the period from the time of granting the warrants and the following 6.6 years. € 906 thousand wasexpensed in the income statement in 2007 for this programme. The market value for the warrants was calculated using the Black-Scholes option pricing model. The main assumptions were as follows. Expected volatility of 26% was calculated based on historical data forcomparable companies. The risk-free interest rate is 3.89% and the share price used is the price for the Nycomed A/S shares has beenestimated at fair value using mark-to-model. The expected life of the warrants has been set to 3 years and no expected dividend has beenincluded in the calculation.The Executive Committee has a total of 146,660 shares and 306,000 warrants as of 31 December 2008. As of 31 December 2007 theexecutive committee had a total of 146,260 shares and 238,600 warrants.The company´s CEO has 58,976 shares and 147,800 warrants. The CEO´s contract is subject to a six month termination clause. In case theBoard of Directors terminates the contract, he will receive severance pay for 18 months in addition to salary during the notice period.Currently a total number of 752,854 warrants, out of which 41,600 were granted in 2007 and 140,000 during 2008. Until now, none ofthese warrants have been exercised.17. Risk ManagementIn regards to Nycomed´s financial risk management objectives and policies reference is made to section in the Management Reportpage 24 and 25.18. financial risks and derivative financial instrumentsMarket riskThe Group is exposed to market risk, primarily related to foreign exchange (currency risk) and interest rates (interest rate risk). Managementactively monitors these exposures. The Group has established strategies to hedge fluctuations in exchange rates and interest rates. The Group’sobjective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in marketinterest rates and foreign currency exchange rates. The Group does not engage in financial transactions or risk exposures that are not related tothe hedging of underlying business-driven risks.Currency riskNycomed is impacted by currency fluctuations which have an impact on profits. Nycomed uses derivatives with the aim of limiting lossesfrom fluctuations in the exchange rate of the Euro against other currencies, especially with the US Dollar, the Mexican Peso, the BrazilianReal, Russian Roubles, Norwegian Kroner, Japanese Yen or the Canadian Dollar. Only forward exchange deals, currency swaps and simplecurrency options are used. These were transacted exclusively with banks that have defined credit ratings.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20086718. financial risks and derivative financial instruments, continuedSenior Facility AgreementThe senior debt facilities can be specified as at 31 December 2008 as stated below:01.01.2008 01.01.2007Effective 31.12.2008 31.12.2007Currency Maturity interest rate € thousand € thousandNon-currentA-tranche USD 2013 IBOR + 1,50% 1,180,423 1,362,120B-tranche USD & EUR 2014 IBOR + 2,25% 1,326,516 1,321,149C-tranche USD & EUR 2015 IBOR + 3,00% 1,326,516 1,321,149Second lien / D-tranche EUR 2016 IBOR + 5,00% 425,000 425,000Drawn under restructuring facility EUR 2014 IBOR + 1,50% 125,000 125,000Local debt 1,999 -Debt buyback -54,820 -4,330,635 4,554,418CurrentA-tranche USD 2009 IBOR + 1,50% 247,237 196,933Local debt 5,059 20,500252,297 217,433total debt 4,582,931 4,771,851financing feesFinancing fees non-current -55,884 -70,755Financing fees current -14,521 -16,027-70,405 -86,782total debt including financing fees 4,512,526 4,685,069In accordance with our Senior Facility Agreement we are committed to hedge minimum 50% of the interest rate risk.Currency risk related to Senior DebtA part of the outstanding debt in Nycomed is denominated in USD in order to mitigate the current cash flow and the USD value ofNycomed in a potential exit. Within the purpose to preserve a part of the unrealised gain on this part of the debt, Nycomed entered intofour cross currency swaps during the first half-year of 2008. In November Nycomed re-struck the swaps, realising part of the unrealised gain.Cross currency swaps used to hedge USD denominated debt01.01.2008 01.01.2007Notional amount 31.12.2008 31.12.2007Market value at 31 December 2008 Currency thousand € thousand € thousandEUR/USD cross currency swap EUR 500,000 -37,845 -EUR/USD cross currency swap EUR 500,000 -40,747 -EUR/USD cross currency swap EUR 250,000 -18,825 -EUR/USD cross currency swap EUR 250,000 -20,374 --117,791 -

68 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes18. financial risks and derivative financial instruments, continuedForeign exchange forwards are used to protect against exposures to variability in future cash flows on highly probable forecast salestransactions. The maturity dates of the foreign exchange derivatives are all within one year.Foreign exchange derivatives are treated as cash flow hedges until the hedged item is recorded on the income statement. Afterwards,they are treated as fair value hedges. Changes in value from the derivatives therefore are initially recognised directly in equity in therevaluation reserve and are transferred to the income statement when forecast sales transactions affect the income statement.At 31 December 2008, there were no outstanding foreign exchange derivatives designated as either cash flow or fair value hedges(2007: € -479 thousand).All fair values of derivative financial instruments in the Nycomed Group are provided by banks. The valuation from the banks arebased on mark to market model.Impact of cash flow hedges under IAS 39Foreign exchange derivatives:Amounts recognised in equity during the period were € -8,183 thousand (2007: € -735 thousand); amounts removed from equityand included in the income statement during the period € 1,613 thousand (2007: € 5,413 thousand).There are no foreign exchange derivatives designated for hedge accounting at 31 December 2008.Impact of fair value hedges under IAS 39Foreign exchange derivatives:Amounts recognised in the income statement for hedge instruments were € -152 thousand (2007: € -3,445 thousand); amountsrecognised for hedged items were € 161 thousand (2007: € -6,118 thousand).Currency risk can be classified in two categories: transaction risk and translation risk. The Group’s transaction risk primarily relates tothe potential change in value of future operations and cash flows resulting from changes in currency rates. Translation risk is related tothe translating of potential change in booked value of assets and liabilities in foreign currencies. Nycomed is mainly exposed with regardto US Dollars, Canadian Dollars, Brazilian Real, Mexican Pesos, Russian Roubles, Norwegian Kroner, Danish Kroner and Japanese Yen.The Group’s main objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associatedwith the changes in market foreign currency rates. Risk management is to limit the short-term negative impact on earnings and cashflows from exchange rate fluctuations.Consequently, the Group enters into various contracts, which change in value as foreign exchange rates change, to preserve the value ofGroup assets, and mitigate currency-related increases in its commitments.Forward contracts are entered into to hedge receivables, payables and cash flows in foreign currencies.There are no foreign exchange derivatives designated for hedge accounting at 31 December 2008.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20086918. financial risks and derivative financial instruments, continued01.01.2008 01.01.2008 01.01.200731.12.2008 31.12.2008 31.12.2007€ thousand € thousand € thousandOutstanding forward contracts by currency Fair value Nominal value Nominal valuepurchases of currencyGBP -51 1,905 13,849CZK -55 2,605 2,656MXN -139 8,318 12,497NOK - - 48,466DKK -6,984 57,727 67,219CHF 222 7,071 3,318SEK -12 2,760 -Total purchases of currency -7,019 80,386 148,006sales of currencyUSD - 64,669 86,261DKK - 6,224 -GBP - - 3,476JPY - - 1,319NOK 2,409 22,564 -CAD - - 65,048total sales of currency 2,409 93,458 156,104

70 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes18. financial risks and derivative financial instruments, continuedSensitivity analysisNycomed has operations in many countries with exposures in many currencies. After performing a detailed currency risk analysis, Nycomedmanagement believes that the major currency risk is based on fluctuations in EUR/USD, EUR/NOK and EUR/RUB.The following table demonstrates the sensitivity to a reasonably possible change in the USD, NOK and RUB exchange rates, with all othervariables held constant, of the Group’s profit before tax due to changes in fair value of monetary assets and liabilities.31.12.2008 € thousandEffectIncrease/ on profitdecrease in and lossexchange rate before taxEUR/USD 10% 14,087EUR/NOK 10% -65,980EUR/RUB 10% -13,44831.12.2007 € thousandEffectIncrease/ on profitdecrease in and lossexchange rate before taxEUR/USD 10% 230,978EUR/NOK 10% -78,227EUR/USD -10% -14,087EUR/NOK -10% 65,980EUR/RUB -10% 13,448EUR/USD -10% -230,978EUR/NOK -10% 78,227Currency risk related to forward coversThe following table demonstrates the sensitivity to a reasonably possible change in the currency fluctuations, with all other variables heldconstant, of the Group’s profit before tax due to changes in fair values of forward instruments.31.12.2008 € thousandEffectIncrease/on profitdecrease inand lossexchange rate before taxUSD/DKK 5% 3,233EUR/NOK 5% -1,07331.12.2007 € thousandEffectIncrease/on profitdecrease inand lossexchange rate before taxEUR/CAD 5% 2,867USD/DKK 5% 3,062EUR/NOK 5% -2,425USD/DKK -5% -3,233EUR/NOK -5% 1,186EUR/CAD -5% -3,063USD/DKK -5% -3,052EUR/NOK -5% 2,421Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20087118. financial risks and derivative financial instruments, continuedInterest rate riskNycomed has a significant level of debt with a variable rate of interest. Changes in interest rates affect our income statement as well asthe balance sheet. The overall objective of interest rate risk management is to limit the negative impact on earnings and on the balancesheet from interest rate fluctuations.In accordance with the terms of the Senior Facility Agreement at least 50% of the interest rate risk was swapped into fixed interest before31 March 2007. The hedge should have a duration of a minimum of two years.As per 31 December 2008, 76.0% of Nycomed´s debt was hedged using interest rate swaps which all expire at the end of March 2009.Interest rate risk related to loans, interest rate swaps and cross currency swapsThe following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant,on the Group’s profit before tax and equity.31.12.2008 € thousand € thousand*Effect on Effect on profit € thousandequity from and loss from Effect on profitIncrease/ interest rate cross currency and loss fromdecrease in swaps before swaps before loan beforebasis points tax tax taxUSD 50 19 -1,700 -11,768EUR 50 5 1,832 -11,11231.12.2007 € thousand € thousand*Effect on Effect on profit € thousandequity from and loss from Effect on profitIncrease/ interest rate cross currency and loss fromdecrease in swaps before swaps before loan beforebasis points tax tax taxUSD 50 9,324 n/a -12,257EUR 50 7,773 n/a -16,466USD -50 -19 1,649 11,768EUR -50 -5 -1,782 11,112USD -50 -9,321 n/a 12,257EUR -50 -7,651 n/a 16,466*If Nycomed no longer qualifies for hedge accounting changes in value will be shown in the P&LThe table below discloses the fair value of the financial instruments applied to swap the interest rate for the individual tranches of the debt.Furthermore, Nycomed is committed to fulfil several restrictions, including testing the covenants on a quarterly basis. In connection withthis we have to deliver a compliance certificate to the syndicate of banks.iNterest rate swaps used to hedge variable rate debt01.01.2008 01.01.2007Notional amount 31.12.2008 31.12.2007Market value at 31 December 2008 Currency thousand € thousand € thousandA-Tranche, maturity 31.03.2009 USD 1,147,540 - -8,697A-Tranche, maturity 31.03.2009 USD 688,524 - -481A-Tranche, maturity 31.03.2009 USD 1,002,588 -6,276 -A-Tranche, maturity 31.03.2009 USD 605,901 -2,840 -B-Tranche & C-Tranche, maturity 31.03.2009 USD 656,775 -4,065 -5,266B-Tranche & C-Tranche, maturity 31.03.2009 USD 394,065 -1,836 -302B-Tranche, C-Tranche & D-Tranche, Maturity 31.03.2009 EUR 1,587,500 -4,095 8,219-19,113 -6,526

72 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes18. financial risks and derivative financial instruments, continuedAt 31 December 2008 all interest rate swaps were designated as cash flow hedges in accordance with IAS 39. Changes in value from thederivatives therefore are recognised directly in equity. Before interest rate swaps were designated as cash flow hedges, changes in fair valuewere recognised directly in the income statement. All interest rate swaps mature in March 2009.At 31 December 2008, the fair values of outstanding interest rate swap derivatives designated as cash flow hedges were € -19,113 thousand(2007: € -6,526 thousand).All fair values of derivative financial instruments in the Nycomed Group are provided by banks.Impact of cash flow hedges under IAS 39Interest rate derivatives:Amounts recognised in equity during the period were € -155 thousand (2007: € - 6,699 thousand). There has been no movement fromequity in 2008 (2007: no movements from equity).Amounts recognised in the income statement for hedge instruments were € -237 thousand (2007: € 172 thousand).During January and February 2009 Nycomed entered into new interest rate swaps with a duration of 18 months starting from 31 March2009. The recent interest rate swap agreements cover approximately 65% of our total interest rate risk.credit riskNycomed continuously monitors and evaluates credit risk on outstanding payments. In general, Nycomed estimates the risk to be limitedfor countries in the EU. In Russia/CIS, the standard payment conditions are cash payment 90-day payment terms. During 2008, Nycomedcontinued its strict control and close follow-up on outstanding payments. Nycomed has had very few defaulted payments in this regionsince theRouble crisis in 1998. Nycomed maintains that this region is subject to higher than average political and economic risk andcontinues to make every effort to secure payment from Nycomed´s customers. Nycomed tries to cover outstanding payments throughinsurance companies. As at 31 December 2009, Nycomed had € 97.5 million outstanding receivables from customers in Russia/CIS, ofwhich 50.5% was covered by credit insurance.Working capitalDue to the current rate of growth in countries with higher than average outstanding - like CIS and Latin America, Nycomed is experiencingincreased pressure on our working capital and longer cycles. During the last month of 2008 Nycomed experienced some prolongation inthe payment terms within the industry in CIS/Russia.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20087318. financial risks and derivative financial instruments, continuedLiquidity riskContractual maturities of financial liabilitiesThe following table demonstrates a maturity analysis for financial liabilities. It shows the remaining contractual maturities on anundiscounted basis.Financial liabilities31.12.2008€ thousand Up to 1 year From 1 to 5 years Over 5 yearsNon-current liabilitiesLoans under Senior Facility Agreement - 2,038,210 3,306,877Cross currency swaps - 154,326 -Bank borrowings (overdraft facility) - 1,999 -Financial liabilities31.12.2007€ thousand Up to 1 year From 1 to 5 years Over 5 yearsNon-current liabilitiesLoans under Senior Facility Agreement - 2,444,138 4,400,889Cross currency swaps - - -Bank borrowings (overdraft facility) - - -Current liabilitiesLoans under Senior Facility Agreement 459,537 - -Cross currency swaps 29,448 - -Interest rate swaps 19,364 - -Bank borrowings (overdraft facility) 5,059 - -Trade payables 265,033 - -Current liabilitiesLoans under Senior Facility Agreement 563,453 - -Cross currency swaps - - -Interest rate swaps - - -Bank borrowings (overdraft facility) 20,500 - -Trade payables 267,159 - -778,441 2,194,535 3,306,877851,112 2,444,138 4,400,889

74 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes18. financial risks and derivative financial instruments, continuedClassification of financial instrumentsThe following table shows a comparison by category of carrying amount and fair values of the financial instruments of the Nycomed Group.Year Ended 31 December 2008Available FVtPL 1) - FVtPL 1) - held Fair value - Held-to- Loans and Other financialfor sale designated for trading designated maturity receivables liabilities Total Fair valuefor hedgeaccountingFINANCIAL ASSETSNon-current assetsOther investments in shares and bonds 26,782 4,934 - - - - - 31,716 31,716Other receivables - - - - - 7,676 - 7,676 7,676Current assetsTrade receivables - - - - - 578,669 - 578,669 578,669Other receivables and prepayments - - 173 - - 14,601 - 14,774 14,774- thereof foreign exchange derivatives - - 173 - - - - 173 173Marketable securities 7,009 4,877 - - - - - 11,886 11,886fiNANCIAL LIABILITIESNon-current liabilitiesFinancial institutions - - - - - - 4,274,750 4,274,750 2,646,865current liabilitiesFinancial institutions - - - - - - 237,776 237,776 163,605Trade payables - - - - - - 265,033 265,033 265,033Other payables - - 117,984 19,113 - - 22,971 160,068 160,068- thereof foreign exchange derivatives - - 117,984 - - - - 117,984 117,984- thereof interest rate derivatives - - - 19,113 - - - 19,113 19,1131) FVtPL stands for Fair value through profit or lossCross currency swaps are reported as foreign exchange derivatives.Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20087518. financial risks and derivative financial instruments, continuedClassification of financial instruments, continuedYear Ended 31 December 2007Available FVtPL 1) - FVtPL 1) - held Fair value - Held-to- Loans and Other financialfor sale designated for trading designated maturity receivables liabilities Total Fair valuefor hedgeaccountingFINANCIAL ASSETSNon-current assetsOther investments in shares and bonds 9,106 4,934 - - - - - 14,040 14,040Other receivables - - - - - 10,587 - 10,587 10,587Current assetsTrade receivables - - - - - 587,415 - 587,415 587,415Other receivables and prepayments - - 2,532 8,219 - 37,715 - 48,466 48,466- thereof foreign exchange derivatives - - 2,532 - - - - 2,532 2,532- thereof interest rate derivatives - - - 8,219 - - - 8,219 8,219Marketable securities 27,900 - - - - - - 27,900 27,900FINANCIAL LIABILITIESNon-current liabilitiesFinancial institutions - - - - - - 4,483,662 4,483,662 4,483,662 2)Current LiabilitiesFinancial institutions - - - - - - 201,406 201,406 201,406 2)Trade payables - - - - - - 267,159 267,159 267,159Other payables - - 566 15,224 - - 30,037 45,827 45,827- thereof foreign exchange derivatives - - 566 479 - - - 1,045 1,045- thereof interest rate derivatives - - - 14,745 - - - 14,745 14,7451) FVtPL stands for Fair value through profit or loss2) The fair value of the senior debt for 2007 is not available

76 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes19. Trade Accounts Receivable01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandTrade accounts receivable - Sales to third parties 589,740 594,122Trade accounts receivable - Royalties 322 281Trade accounts receivable - Other 755 742gross Total Trade Receivables 590,817 595,145Allowance for doubtful accounts -12,148 -7,730Net Total Trade Receivables 578,669 587,415Ageing Analysis Trade accounts Receivables01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandNeither past due nor impaired 447,139 442,812Overdue 1 to 30 days 68,177 94,825Overdue 31 to 60 days 16,836 18,081Overdue 61 to 90 days 9,758 7,897Overdue 91 to 360 days 23,685 14,218Due 1 year to 2 years 7,553 9,280Overdue more than 2 years 5,521 301total Balances Due 578,669 587,415Accounts receivable by currency01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandEuro 288,017 259,036Swiss Francs 8,607 8,430US Dollar 57,759 76,002Japanese Yen 4,004 2,084Brasilian Real 24,430 30,169Swedish Krona 4,153 4,203Danish Krona 12,173 12,949Canadian Dollar 11,615 42,150Australian Dollar 10,398 10,210Mexican Peso 23,819 18,984Roubles 74,683 77,700Other 59,011 45,498total 578,669 587,415Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20087720. Capital Management01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandInterest bearing debt Senior credit facilities incl. financing fee 4,576 4,751Cash and short term deposits -496 -484Net debt 4,079 4,267Equity including minority interests 1,321 1,380Total capital 1,321 1,380Capital and net debt 5,400 5,647Net turnover 3,348 3,497EBITDA 1,142 997Adjusted EBITDA 1,207 1,222The primary objective of Nycomed Group´s capital management is to ensure that the Group is able to fulfil all its obligations as set out inthe Senior Facility Agreement. Covenants are calculated and reported to the banks on a quarterly basis. The following covenants are testedon a quarterly basis.Leverage - Total Net Debt/Adjusted EBITDA (total debt included in the governance calculation is adjusted as shown above)Fixed Charge Coverage - Cash Flow/Total Funding CostsInterest Cover- EBITDA/Total Net InterestIn addition we have a maximum amount related to the yearly spend on capital expenditure imposed on the Group.The covenants are all met in 2008.Nycomed is rated by Standard & Poors and Moody´s as of 31 December 2008. Our ratings were +B/stable and B2 (for 2007 our ratingswere +B/stable and B1 respectively).In accordance with our Capital Management policies we have not proposed or paid any dividend in any of the periods presented.

78 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes21. Related party transactionsRelated parties with a significant interest include group enterprises and associated enterprises, including such enterprises´s supervisoryboards, executive boards and executive officers and members of their families. Furthermore, related parties include enterprises andcompanies in which aforementioned persons have significant interests.In the period presented, no related party transactions with members of the supervisory or executive boards, executive officers, significantshareholders, other than stated in note 16 took place.All intra-Group transactions, shareholdings, intra-Group dividends and balances and realised and unrealised gains and losses and intra-Group transactions are eliminated.The following table provides the total amount of transactions, which have been entered into with related parties for the relevant financial year:Amounts AmountsSales to related Purchases from owed by owed toparties related parties related parties related parties€ thousand € thousand € thousand € thousandentities with significant influence over the Group:Nordic Capitaljoint venture in which Nycomed SCA SICAR is a venturer:Nycomed Madaus (Pty) Ltd (South Africa) - 50%Zydus Nycomed Healthcare Private Ltd (India) - 50%2008 - 1,950 - -2007 - - - -2008 - 1,082 - -2007 - - 161 -2008 - - - -2007 - - - -Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20087921. Related party transactions, continuedentities with significant influence over the Group:Nordic Capitaljoint venture in which Nycomed SCA SICARNycomed Madaus (Pty) Ltd (South Africa)Zydus Nycomed Healthcare Private Ltd (India)Interest/dividends Interest/dividendsLoans from Loans to received from paid torelated parties related parties related parties related parties€ thousand € thousand € thousand € thousand2008 - - - -2007 - - - -2008 - - - -2007 - - - -2008 - 1,754 - 72007 - - - 8Terms and conditions of transactions with related partiesThe sales to and purchases from related parties are made at normal market prices. Outstanding balances at the year-end are unsecured,interest free and settlement occurs in cash. There have been no guarantees provided or received to any related party receivables orpayables. For the year ended 31 December 2008, Nycomed SCA SICAR has not recorded any impairment of receivables relating toamounts owed by related parties (no changes with respect to 2007). This assessment is undertaken each financial year through examiningthe financial position of the related party and the market in which the related party operates.

80 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotes22. Auditor’s Fee01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandAudit fees, Ernst & Young 3,231 3,169Audit fees, PwC - 1,706Audit fees, other - 24total audit fees 3,231 4,899Fees for other services, Ernst & Young 717 567Fees for other services, Other - 435total fees other services 717 1,002total 3,948 5,90123. Adjustments01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandDepreciations property, plant and equipment 93,424 87,098Amortisations of goodwill and other intangibles 697,260 556,203Amortisation of inventory step-up - 50,243Warrants programme 3,777 906Change in provisions -54,786 1,377Other gains and losses 561 -Total 740.236 695,827Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 20088124. Repayment of long-term bank debt01.01.2008 01.01.200731.12.2008 31.12.2007€ thousand € thousandRepayment Senior Credit Facility -248,261 -82,055Repayment Revolving Facility - -250,000Drawn Restructuring Facility - 125,000Repayment In-licensing Facility - -241,206total -248,261 -448,26125. Interest paidInterest related to Senior Credit Facilities -345,414 -365,201Other Financial Expenses - -6,261Foreign exchange gain/losses 7,376 -23,600total -337,838 -395,06226. Subsequent eventsSpecific reference is made to the subsequent events section on page 13 in the Management report.

82 Nycomed Annual Report 2008Financial Statements>Nycomed S.C.A. SICARNotesThe table below contains information on the subsidiaries included in the consolidated financial statements as of 31 December, 2008Nominal CapitalStockCompany Country (in thousands) Equity interestNycomed S.A. Argentina ARS 17,751 100%Nycomed Pty. Ltd. Australia AUD 451 100%Nycomed Holding GmbH Austria EUR 64,145 100%Nycomed Austria GmbH Austria EUR 10,602 100%Nycomed East Europe Marketing Service GmbH Austria EUR 37 100%Chemisch Pharmazeutische Forschungs GmbH Austria EUR 37 100%B.N.S. Pharma Vertriebsges.m.b.H. Austria EUR 37 100%Nycomed Pharma GmbH Austria EUR 600 100%Nycomed Christiaens SCA/CVA Belgium EUR 5,578 100%Nyco Holdings Sprl Belgium EUR 19 100%Nycomed Belgium SCA/CVA Belgium EUR 436 100%Nycomed Pharma Ltda. Brazil BRL 23,826 100%Nycomed Canada Inc. Canada CAD 6,000 100%Nycomed d.o.o Croatia HRK 20 100%Nycomed s.r.o. Czech Republic CZK 1,000 100%Nycomed A/S Denmark EUR 99 100%Nyco Holdings ApS Denmark DKK 1,118 100%Selskab NO 26 81 23 05 APS Denmark DKK 3,723 100%Nyco Holdings 2 ApS Denmark DKK 745 100%Nyco Holdings 3 ApS Denmark DKK 745 100%Nycomed Holding ApS Denmark DKK 10,200 100%ApS KBIL 38 NR 2505 Denmark DKK 125 100%Nycomed Danmark ApS Denmark DKK 800,000 100%Nettopharma ApS Denmark DKK 125 100%Ecobalance ApS Denmark DKK 4,000 100%Purchase Vehicle of November 10, 2008 ApS Denmark EUR 20 100%Nycomed SEFA AS Estonia EEK 2,200 100%Oy Leiras Finland AB Finland EUR 1,322 100%Nycomed Finland Holding OY Finland EUR 44,000 100%Nycomed France S.A.S. France EUR 920 100%Nycomed Germany Holding GmbH Germany EUR 10,000 100%Nycomed GmbH Germany EUR 70,000 100%Nycomed Asset Management GmbH Germany EUR 5,625 100%Nycomed Deutschland GmbH Germany EUR 2,000 100%Nycomed RE Insurance AG Germany EUR 7,500 100%Byk Tosse Arzneimittel GmbH Germany EUR 30 100%Schnetztor Verlag mbH Germany EUR 30 100%Unipharma GmbH Germany EUR 30 100%Byk Diagnostica (Verwaltung) GmbH Germany EUR 1,050 100%Nycomed Hellas, Pharmaceutical, Commercial & Industrial S.A. Greece EUR 2,700 100%Company Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

Nycomed Annual Report 2008 83Nominal CapitalStockCompany Country (in thousands) Equity interestNycomed Christiaens B.V. Netherlands EUR 445 100%Nycomed BV Netherlands EUR 10,000 100%Nycomed Pharma KFT Hungary HUF 3,000 100%Zydus Nycomed Healthcare Private Limited India INR 200,000 50%Nycomed Pharma Private Limited India INR 333,916 100%Nycomed Products Ltd. Ireland EUR 100 100%Nycomed Italia S.r.l. Italy EUR 100 100%Nycomed S.p.A. Italy EUR 1,500 100%Nycomed Japan K.K. Japan JPY 20,000 100%Nycomed Latvia SIA Latvia LVL 4 100%Nycomed UAB Lithuania LTL 10 100%Nycomed Admin. S.A. de C.V Mexico MXN 1,000 100%Nycomed Operaciones S.A. de C.V Mexico MXN 1,000 100%Nycomed Pharma S.A.de C.V Mexico MXN 50 100%Nycomed S.A. de C.V. Mexico MXN 1,741 100%Byk Gulden S.A. de C.V. Mexico MXN 1,000 100%Nycomed Pharma AS Norway NOK 79,200 100%Nycomed Norway Holding AS Norway NOK 120 100%Nycomed Pharma Sp.z.o.o Poland PLN 191,333 100%Nycomed Sp. z o.o. Poland PLN 81 100%Nycomed Portugal Lda. - Produtos Químicos e Farmacêuticos Portugal EUR 249 100%Nycomed Pharma SRL Romania RON 4 100%SC Ruby de Tacos S.R.L. Romania RON 3 100%Nycomed Closed Joint Stock Company Russia RUB 540 100%Nycomed Distribution Center T.O.O Russia RUB 0.1 100%Nycomed Siberia Limited Liability Company Russia RUB 291 100%Nycomed s.r.o. Slovakia SKK 250 100%Nycomed Madaus Proprietary Limited South Africa ZAR 1,400 50%Nycomed Spain SL Spain EUR 503 100%Nycomed Pharma S.A. Spain EUR 1,214 100%Nycomed Sweden Holding 1 AB Sweden EUR 94,715 100%Nycomed Sweden Holding 2 AB Sweden EUR 138 97.36%Nycomed AB Sweden SEK 2,000 100%Nycomed Sweden Holding AB Sweden EUR 11 100%Nycomed Pharma AG Switzerland CHF 500 100%Nycomed Intern. Management Gmbh - Switzerland Switzerland CHF 1,500 100%Altana Ilac Ticaret Limited Sirketi Turkey TRY 15 100%Nycomed UK Limited UK GBP 300 100%Altana Pharma Limited UK GBP 500 100%Nycomed Ukraine LLC Ukraine USD 10 100%Nycomed US Inc. USA USD 4,000 100%Nycomed Venezuela S.R.L. Venezuela VEF 2 100%

84 Nycomed Annual Report 2008Contacts>ContactsFor further information about Nycomedplease get in touch.Nycomed InternationalManagement GmbHLeutschenbachstrasse 95CH-8050 ZurichSwitzerlandPhone +41 44 555 10 00www.nycomed.comInvestor RelationsChristian B. SeidelinPhone +41 44 555 11 04christian.seidelin@nycomed.comCorporate CommunicationsWalter VaterlausPhone +41 44 555 15 10corporatecommunications@nycomed.comMedia RelationsTobias Cottmann, Beatrix BenzPhone +41 44 555 15 10corporatecommunications@nycomed.comCompany Profile | CEO letter | Management Report | products | Pipeline | Corporate Governance | Financial Statements | Contacts

DEfinitions of key figuresand financial ratiosEBITDA = Earnings before interest, tax, depreciationand amortisationAdjusted EBITDA = EBITDA adjusted for inventory step-upvalues as a result of purchase accounting,restructuring and integration expensesand project costs regarding abandonedacquisition and the effect from thewarrants programmeGross profit margin = Gross profit x 100/Total net turnoverEBITDA margin = EBITDA x 100/Total net turnoverAdjusted EBITDA margin = Adjusted EBITDA x 100/Total net turnoverNYCOMED S.C.A. SICAR412F Route d’EschL-1030 Luxembourgwww.nycomed.com