In February 2000, the acquisition of Praelux Inc provided us with technology for taking our screening capability into secondary screening, a major bottleneck in drug development. We expect this technology to enable researchers to view the effect of drug candidates in real time within the living cell, thereby providing earlier information on drug metabolism and toxicology and potentially reducing the clinical trial failure rate. A technology access and collaboration programme is already in place for this new cell analysis platform, through which we will work with pharmaceutical companies to develop customised assays.

Bioinformatics
Bioinformatics is the application of computer technology to acquire, annotate, manage and analyse the large amounts of biological data being generated from genomic and proteomic research. Working with our collaborator Cimarron Software, our Laboratory Workflow Systems (LWS) will help researchers manage their production-scale technology programmes and will be the first in our Scierra™ product range. To be launched in the second half of this year, the LWS will particularly enable customers wanting to track, integrate and compare data from our various genomic and proteomic platforms.

Separations
Our separations business provides systems for the purification of biological molecules such as proteins on a laboratory and industrial scale.

Separations continued to grow strongly, with excellent performances from both our bioprocess business and our laboratory separations business. Sales for 2000 were £222 million, up 19 per cent. Operating profit before exceptional items and goodwill amortisation was £67 million, up from £47 million in 1999.

Our separations business has a strong market franchise in products for protein purification, a position built from over 40 years’ experience. Our state of the art chromatography media and systems are used for a broad range of applications, from basic research in academic laboratories (laboratory separations) to full scale manufacturing of biopharmaceuticals (bioprocess). Our strength is built on this combination of products for laboratory and manufacturing use, since many of our customers will use our products in research and then scale up the processes to industrial production. Once they are being used in industrial production, our products become part of the biopharmaceutical’s licensing manufacturing protocol. We are continuing to invest in new products and in providing the market with technical support through many channels, including the Internet. There are two major drivers for the increased demand of protein purification products:

• There is a growing pipeline of biopharmaceuticals. There are now over 80 biopharmaceuticals on the market, with our products used in the manufacture of almost every one. The number of biopharmaceuticals is growing rapidly, with more than 370 in clinical trials. In addition, we have seen extended indications for already-licensed biopharmaceuticals and a growth in monoclonal antibodies, which are produced in larger volumes than other biopharmaceuticals.
• Following the completion of the draft human genome, the focus of life science research is shifting towards the study of proteins. Protein purification is a key element of most of the laboratory procedures in protein research.

In addition to our strong underlying growth in 2000, we were able to deliver some particularly large orders in the bioprocess area. These included contracts for Source™ and Protein A Sepharose™ (protein purification media) to biopharmaceutical customers in Europe and the US, for use in the manufacturing of insulin and monoclonal antibodies. We also delivered a large order for our OligoPilot™ oligosynthesis systems to a customer in the US.

Building on our core protein purification business, we are exploring new technologies and products used in the manufacturing of biopharmaceuticals. In April, we signed a deal to acquire distribution rights to a virus inactivation technology from V.I. Technologies Inc. This transaction is the first step in a series of activities to establish a portfolio of products and services to ensure biopharmaceuticals are cleared of active viruses.

To further strengthen our leading market position, we continue to invest in R&D. In 2000, this investment resulted in the launch of a number of new products including MabSelect™, a new media for high efficiency purification of monoclonal antibodies; ÄKTA™ prime, a bench top laboratory protein purification system; and ÄKTA OligoPilot, a system for bench top manufacturing of oligonucleotides.

Laboratory products
In our laboratory products business, we provide tools and technologies used by researchers in over 100,000 laboratories around the world to purify, detect and analyse biological molecules.

Sales for 2000 totalled £180 million, level with 1999 and halting the seven per cent decline seen in the previous year. Operating profit before exceptional items and goodwill amortisation fell £14 million to £20 million, largely as a result of a change in product mix, with a decline in sales of the more mature high margin radiochemical products, and increased investments in sales and marketing relating to new products. The comparative result for 1999 included income of £3 million relating to a favourable patent infringement settlement.

We continue to focus on applications such as gene expression and protein analysis and on our strong brands.

In 2000 we launched several new products , including the Typhoon™ scanner in the first half of the year and the Ready-To-Run™ instrument and Ready-To-Go™ beads, for improved DNA analysis, in the second half. The growth in genomics and protein research had a positive impact on sales of our molecular biology reagents and kits.

During 2000, we further developed our electronic ordering and other web-based services.

Outlook
Nycomed Amersham has made a good start to 2001 in both of our businesses. The strong trends evident in 2000 in Imaging are expected to continue in 2001, with patented products accounting for an increased proportion of turnover and the focus on disease areas continuing to drive growth. In Amersham Pharmacia Biotech, we should see the benefit of new product launches in drug discovery, together with continued good momentum in separations.

Sir William Castell
Chief Executive