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Sales Concept for Prostate Cancer Products Altered as a Result of the Possible Elimination of Milestone Payments - Potential Delay in Profits Offset for the Most Part by the Good Business Development

(Ad hoc press release)

Berlin, 05.12.2000. In December Eckert & Ziegler Strahlen- und Medizintechnik AG will, for the first time, commence the direct supply of products for the treatment of prostate cancer to European hospitals for its own account. As such the company is relinquishing its traditional stance within the European Union as a supplier of components only, and has implemented its own sales force to approach clinics and doctors directly with the offer of an integrated range of products and services. The decision to cut out the former middleman became necessary following the failure to resolve a disagreement concerning the settlement of a major project that raised serious doubts about the current sales concept. As the Chief Executive Officer of the company, Dr. Andreas Eckert, explains: "Commencing direct sales of prostate cancer products was foreseeable, anyway, given the attractive margins and the strategic importance of staying in close contact with the clinics. The decision was, however, accelerated by the disagreement, which arose when our middleman used milestone payments for the successful completion of a product line as a means of exerting pressure to sign a distribution agreement, by coupling a due final payment of USD 2.5 million with unacceptable price and delivery terms. As a result the Board had no other choice but to protect its earnings potential and manoeuvrability by pushing ahead with establishing its own sales force and approaching end users directly. We are also willing to fight for the due milestone payments in court." If no agreement is reached during the fourth calendar quarter, a settlement of some 3 million Euro will not be included as profits until a decision has been reached by the courts. In view of the good business development in other fields, however, this would still mean that annual profits for the year 2000 (after taxes) would only decline by 0.7 million Euro to 1.4 million Euro. In addition to radioactive implants, Eckert & Ziegler will in future also sell accessories and positioning systems directly. The market for these products is growing at an extraordinary rate and should exceed 100 million Euro in Europe alone by the year 2004. Currently Eckert & Ziegler AG holds a market share in this field of about one-third.

The Board of Directors