August 23, 2006: Fresenius Kabi and Sandoz to cooperate in the development of an HESylated biopharmaceutical drug

Fresenius Kabi and Sandoz have entered into a partnership to develop a modified form (or “second-generation”) biopharmaceutical drug.

In the agreement, Fresenius Kabi will license its proprietary HESylation technology to Sandoz. This technology platform is based on hydroxyethyl starch (HES) and enables the targeted modification of drugs by coupling HES to an active ingredient. This type of modification may be used to extend the half-life and improve the safety profile of a drug.

Fresenius Kabi and Sandoz will employ the HESylation technology to develop an improved, second-generation biopharmaceutical drug based on a recombinant protein from the Sandoz pipeline. Fresenius Kabi will be responsible for adapting and developing the appropriate HES derivative. Sandoz will oversee pre-clinical and clinical development of the drug. Fresenius Kabi will receive milestone payments for the protein-specific licensing of the HESylation technology.

Fresenius Kabi plans to further exploit the potential of the technology by partnering with leading pharmaceutical and biotechnology companies.

HESylation-Technology
HESylation is based on the extensive expertise in the field of hydroxyethyl starch (“HES”) that Fresenius Kabi has gathered as the world’s largest producer of HES. HES is derived from waxy maize starch and can be metabolized by the body’s enzymes. HES solutions are usually administered to substitute deficient blood volume and to improve the rheological properties of the blood.

The HESylation technology allows a targeted modification of drugs and their characteristics by a specific coupling with HES derivates. This can affect key drug parameters such as absorption, metabolization, half-life, water solubility and safety.

Fresenius Kabi has a broad portfolio of patents and patent applications covering coupling chemistries, so-called special linkers and HESylated drugs on a target-by-target basis. For details please visit http://www.hesylation.com/ .

Recombinant Proteins
Recombinant proteins are proteins that have been produced using genetically modified organisms.

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Fresenius Kabi is the leader in Infusion Therapy and Clinical Nutrition in Europe and in its most important countries of Latin America and Asia Pacific. Fresenius Kabi’s core product range includes infusion solutions for fluid substitution, blood volume replacement, intravenously administered drugs as well as parenteral and enteral nutrition. Furthermore, the company offers medical devices for the application of Infusion Therapy and Clinical Nutrition and Infusion Management. In addition, Fresenius Kabi is active in the field of Transfusion Technology, supplying blood processing systems as well as blood bags and filters.

Fresenius Kabi focuses on the treatment and care of critically and chronically ill patients in and outside the hospital. The company has more than 15,000 employees worldwide and a global network of approx. 50 sales organizations and 40 productions sites. Fresenius Kabi achieved sales of € 1,681 million and an operating profit of € 234 million in 2005. Fresenius Kabi AG is a 100% subsidiary of the health care group Fresenius AG. For details please visit http://www.fresenius-kabi.com .

This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. Fresenius does not undertake any responsibility to update the forward-looking statements in this release.

Dr. Bernd Ebeling, Corporate Communications

Tel.: +49 - 6172 - 6082378

Fax: +49 - 6172 - 6082294
e-mail: pr-fre@fresenius.de

www.fresenius-ag.com