MDS Announces Strategy to Focus MDS Pharma Services on Early Stage Operations - Discovery Through...( Company to Divest Late Stage Operat...),Health

    Company to Divest Late Stage Operations, Signs Agreement to Sell
    Phase II-IV Operations to INC Research

TORONTO, June 1 /PRNewswire-FirstCall/ - MDS Inc. (TSX: MDS; NYSE: MDZ), a leading provider of products and services to the global life sciences markets, today announced that it will strategically focus its MDS Pharma Services business on the delivery of Early Stage (Discovery through Phase IIa) contract research organization (CRO) services.

The Company intends to sell its MDS Pharma Services Late Stage operations, which are comprised of Phase II-IV operations and Central Labs. MDS has signed an agreement to sell its Phase II-IV operations to INC Research, Inc., a leading global provider of CRO services, for $50 million, including certain transition services, and subject to customary post closing contingencies and adjustments. A suitable buyer is being sought for Central Labs.

These decisions are a result of MDS's ongoing strategic review process. They will support the Company's efforts to advance its leadership position in the delivery of Early Stage CRO services, where it has a top-three market position.

"We are taking action to enhance shareholder value by focusing our business portfolio on areas where we believe we can expand market leadership," said Stephen P. DeFalco, President and Chief Executive Officer, MDS Inc. "While our investments in MDS Pharma Services' Late Stage have significantly strengthened the business, further success requires greater scale. By divesting our Phase II-IV operations, we will be better able to take advantage of our core competencies in Early Stage. We believe this will prove beneficial to the success of the business, to customers and to shareholders."

Phase II-IV

Under the terms of the agreement, INC Research will acquire MDS Pharma Servic
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