APBIOTECH, S-1, 2000-10-02

APBIOTECH
S-1, 2000-10-02

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 2, 2000

REGISTRATION NO. 333-____

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
APBiotech Inc
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 8731 22-3747272
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)

800 CENTENNIAL AVENUE
PO BOX 1327, PISCATAWAY
NEW JERSEY 08855-1327
(732) 457-8000
</TABLE>

(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)

ANDREW CARR
CHIEF EXECUTIVE OFFICER
APBIOTECH INC
800 CENTENNIAL AVENUE
PO BOX 1327, PISCATAWAY
NEW JERSEY 08855-1327
(732) 457-8000

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:
JEFFREY M. OAKES MARK KESSEL
DAVIS POLK & WARDWELL SHEARMAN & STERLING
99 GRESHAM STREET 599 LEXINGTON AVENUE
LONDON EC2V 7NG NEW YORK, NEW YORK 10022
UNITED KINGDOM (212) 848-4000
44 20 7418-1300

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, please check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE(1)

<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE(2) REGISTRATION FEE

<S> <C> <C> <C>
Common Stock, par value $ per share $100,000,000 $26,400
</TABLE>

(1) In accordance with Rule 457(o) of the Securities Act, the number of shares
being registered and the proposed maximum offering price per share are not
included in this table.

(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457 under the Securities Act.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED , 2000

SHARES
(LOGO)
APBIOTECH INC

COMMON STOCK

APBIOTECH INC IS OFFERING ____ SHARES OF ITS COMMON STOCK. THIS IS OUR INITIAL
PUBLIC OFFERING AND NO PUBLIC MARKET CURRENTLY EXISTS FOR OUR SHARES. WE
ANTICIPATE THAT THE INITIAL PUBLIC OFFERING PRICE WILL BE BETWEEN $ AND
$ PER SHARE.

WE HAVE APPLIED TO LIST THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET UNDER THE
SYMBOL "APBI."

INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 10.

PRICE $ A SHARE

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNTS AND APBIOTECH
COMMISSIONS

<S> <C> <C> <C>
Per Share $ $ $
Total $ $ $
</TABLE>

APBiotech has granted the underwriters the right to purchase up to an additional
shares of common stock to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
or about , 2000.

MORGAN STANLEY DEAN WITTER GOLDMAN, SACHS & CO.
CHASE H&Q SALOMON SMITH BARNEY

, 2000
<PAGE> 3
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary ................................................ 3
The Offering ...................................................... 7
Summary Consolidated Financial Data ............................... 8
Risk Factors ...................................................... 10
Forward-Looking Statements ........................................ 19
Use of Proceeds ................................................... 20
Dividends ......................................................... 20
Capitalization .................................................... 21
Dilution .......................................................... 22
Unaudited Pro Forma Condensed Financial Statements ................ 23
Selected Consolidated Financial Data .............................. 29
Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................... 31
Business .......................................................... 50
Management ........................................................ 74
Principal Stockholders ............................................ 84
Relationship with Nycomed Amersham and Pharmacia................... 85
Description of Capital Stock ...................................... 90
Shares Eligible for Future Sale ................................... 94
Material United States Federal Income Tax Consequences to
Non-United States Stockholders .................................. 96
Underwriters ...................................................... 98
Legal Matters .....................................................100
Experts ...........................................................100
Where You Can Find More Information ...............................100
Index to Consolidated Financial Statements ........................F-1

</TABLE>

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of the common stock. In this prospectus, "APBiotech,"
"we," "us" and "our" refer to APBiotech Inc and its subsidiaries.

We have not taken any action to permit a public offering of the common
stock outside the United States or to permit the possession or distribution of
this prospectus outside the United States. Persons outside the United States who
have come into possession of this prospectus must inform themselves about and
observe restrictions relating to the offering of the common stock and the
distribution of this prospectus outside the United States.

This prospectus contains estimates regarding our market size and share.
These estimates are based on third party sources as well as internal company
information. Although we believe the third party estimates are reasonable, we
have not independently verified them. Similarly, while we believe our internal
research is reliable, it has not been verified by any independent sources.

UNTIL , 2000 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
THAT BUY, SELL OR TRADE OUR COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

2
<PAGE> 4
PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information regarding us and our common stock and our financial statements
appearing elsewhere in this prospectus.

APBIOTECH

We are a leading global provider of biotechnology systems, products and
services for research into genes and proteins, for the discovery and development
of drugs, and for the manufacture of biopharmaceuticals. During 1999, our net
sales totaled over $860 million. Our 50,000 customers include pharmaceutical,
biotechnology and agrochemical companies, research institutes, universities and
medical research centers.

We have a long-standing commitment to research and development and a track
record of innovation. This has enabled us to build a strong, broad product
portfolio and future product pipeline.

Our technology platforms span the entire drug discovery and development
process, from understanding the genes and proteins that may be responsible for
disease, to screening possible drug candidates and developing them in clinical
trials, to manufacturing biopharmaceuticals such as insulin.

The following chart illustrates the breadth of our technology platforms.

DRUG DISCOVERY AND DEVELOPMENT PROCESS

[FLOW CHART]

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<PAGE> 5
STRATEGY AND COMPETITIVE STRENGTHS

Our strategy is to build on our position as a leading provider of
biotechnology systems to enable the molecular medicine revolution. We are well
positioned at the heart of the gene economy, a new economy driven by the
accelerated understanding of human genetic make-up and one which will have a
significant and widespread impact on healthcare. Our systems, products and
services are critical components of research into genes and proteins, the
discovery and development of drugs, and the manufacture of biopharmaceuticals.

We believe that we are well positioned with both our commercial and
academic customers as a result of a diverse set of competitive strengths, which
include:

- The breadth of our technology platforms and our comprehensive product
lines which span the entire drug discovery and development process. We
offer well-recognized, branded products such as MegaBACE, LEADseeker
and Sepharose.

- Our commitment to research and development, our long-standing
reputation for scientific excellence and our development of innovative
products for researchers. We have a strong record in developing, and
are continuing to develop, state-of-the-art technologies, both
internally and in partnerships with others. Our research and
development is supported by a strong intellectual property portfolio,
a vital asset in our industry.

- Our partnership approach. We have a history of strategic development
through acquisitions, investments and research alliances as well as
through strategic partnerships with our customers. These alliances
have resulted in some of our key products and have provided us with
access to new technologies.

- Our global market franchise with strong customer relationships. Our
global strengths in sales, operations and research and development
enable us to offer our customers a complete set of products to meet
their needs. Our pioneering technology transfer model, under which
customers can gain early access to developing technologies, has been
adopted by all of the top 20 and most of the top 50 pharmaceutical
companies. Our separations systems or media are used in the production
of almost all biopharmaceuticals.

- An integrated portfolio. Our Laboratory products business provides an
important route to market for products from our Drug discovery
business once these products become widely accepted by the general
research community, thus enabling effective life cycle management. We
have also created a strong link between our Laboratory separations
products and our Bioprocessing business where we enable customers to
scale up processes for the purification of biopharmaceuticals which
have been developed in the laboratory.

- Strong management team. We have a strong management team with an
average of over 15 years of experience in the life sciences industry.

4
<PAGE> 6
Our business includes three principal segments, summarized below, with
shared activities in research and development, sales and marketing,
distribution, manufacturing and service.

<TABLE>
<CAPTION>
ESTIMATED
MARKET MARKET MARKET
BUSINESS SEGMENT TYPES OF PRODUCTS SIZE(1) SHARE(1) POSITION(1)
<S> <C> <C> <C> <C>
Drug discovery High throughput systems to improve the $1.5bn 15% 2
effectiveness of pharmaceutical research and
development and the speed to market for
drugs, including:
- genetic analysis and sequencing
- protein analysis and characterization
- drug screening
- metabolism and toxicology studies
- single nucleotide polymorphism, or SNP
analysis

Separations
- Bioprocessing Chromatographic systems for the purification $350m 55% 1
and production of biopharmaceuticals, such
as insulin and vaccines, on a large scale

- Laboratory Laboratory scale systems for the purification $400m 30% 1
separations and separation of proteins

Laboratory products Tools and technical knowledge for the $2.0bn 15% 1
purification, detection and analysis of
biological molecules by life science
researchers
</TABLE>

-----------------

Source: Company estimates.

(1) As of December 31, 1999.

COMMITMENT TO RESEARCH

We are founded on a strong research and development heritage, employing
over 900 scientists. We invested $89.6 million, or 10.4% of our net sales, in
research and development in 1999. In 2000, we increased our investments in
research and development to take advantage of significant growth opportunities,
particularly in sequencing and drug screening. All of our research and
development spending decisions are based on our belief in a technology's
commercial viability and its ability to meet our return on investment criteria.

We continue to invest in new technologies, developed both internally and
externally. We have research facilities in Uppsala, Sweden; Cardiff and Amersham
in the United Kingdom; Piscataway, New Jersey and Sunnyvale and San Francisco,
California in the United States; and Tokyo, Japan. External development is
achieved through collaborations with specialist companies as well as academic
researchers. Our intellectual property position, which is a key asset in our
industry, continues to be strong. We currently own 536 issued patents and have
602 patent applications pending. During 1999 alone, we applied for 63 new
patents.

5
<PAGE> 7
RELATIONSHIP WITH NYCOMED AMERSHAM AND PHARMACIA

On August 5, 1997 Nycomed Amersham plc (formerly Amersham International)
formed a new subsidiary, Amersham Pharmacia Biotech Ltd., which we refer to in
this prospectus as APBiotech Ltd., which included the operations of its Life
Science division. APBiotech Ltd. then merged with Pharmacia Biotech, the
Swedish-based biotechnology supply business of Pharmacia (formerly Pharmacia &
Upjohn). The merger was accounted for under the purchase method of accounting.
Nycomed Amersham and Pharmacia entered into a number of agreements, including a
shareholders' agreement relating to the corporate governance and operation of
our business, a general services agreement, contract manufacture agreements and
trademark license agreements. Since our formation, we have been run as a
separate legal entity.

REORGANIZATION

In order to facilitate our initial public offering, Nycomed Amersham and
Pharmacia have agreed to reorganize their existing shareholdings in APBiotech
Ltd. by forming APBiotech Inc, a Delaware corporation, to issue the shares in
this offering and become the holding company for our operating businesses. The
formation of APBiotech Inc, the restructuring of the shareholder arrangements
and share ownership, revisions to our existing capital structure, including the
issuance of two classes of stock, and changes to certain other existing
arrangements with Nycomed Amersham are all part of the reorganization. As part
of the reorganization Pharmacia will receive our Class B common stock. The
reorganization will be completed just prior to the closing of this offering.

Prior to implementation of the reorganization and this offering, Nycomed
Amersham controls 55% and Pharmacia controls 45% of our issued share capital.
Immediately after this offering, Nycomed Amersham's percentage of the voting
rights in our outstanding common stock will be reduced to approximately 45%, but
we will continue to be consolidated with the Nycomed Amersham group. Pharmacia's
percentage of the voting rights in our outstanding common stock will remain the
same.

Our principal executive offices are located at 800 Centennial Avenue, PO
Box 1327, Piscataway, New Jersey 08855-1327. Our telephone number is (732)
457-8000. Our address on the worldwide web is www.apbiotech.com. Information
contained in or connected to our website will not be deemed to be incorporated
into this prospectus or the registration statement.

7
<PAGE> 8
THE OFFERING

Common stock offered ........................ shares

Common stock to be outstanding after
this offering:

Common stock ................................ shares

Class B common stock(1) ..................... shares

Total ............................... shares

Over-allotment option ....................... shares

Voting rights:

Common stock ................................ One vote per share

Class B common stock ........................ 1.14 votes per share

Use of proceeds ............................. Our net proceeds from this
offering will be about $
million. We will use a portion
of the net proceeds for general
corporate purposes, primarily to
fund our operations. We will use
approximately $ million to
repay indebtedness owed to
Nycomed Amersham. Any remaining
proceeds will be deposited with
Nycomed Amersham on market
terms, available to us on demand
when needed for the operation of
our business.

Dividend policy ............................. We do not intend to pay
dividends on our common stock
for the foreseeable future. We
plan to retain any earnings for
use in the operation of our
business and to fund future
growth.

Nasdaq ...................................... National Market Application has
been made to have our shares
approved for quotation on the
Nasdaq National Market.

Proposed Nasdaq National Market symbol ...... APBI

----------------

(1) To be issued to Pharmacia as part of the reorganization.

8
<PAGE> 9
Unless we specifically state otherwise, the information in this prospectus does
not take into account the issuance of up to shares of common stock which the
underwriters have the option to purchase solely to cover over-allotments. If the
underwriters exercise their over-allotment option in full, shares of common
stock will be outstanding after this offering.

9
<PAGE> 10
SUMMARY CONSOLIDATED FINANCIAL DATA

The following table presents summary consolidated financial and operating
data for Amersham Pharmacia Biotech Ltd., or APBiotech Ltd, and predecessor
companies. The data presented in this table are derived from "Selected
Consolidated Financial Data" included elsewhere in this prospectus. You should
read that section for a further explanation of the financial data summarized
here. The pro forma information gives effect to the reorganization as if it had
occurred on January 1, 1999. For more information regarding this pro forma
information, you should read the "Unaudited Pro Forma Condensed Financial
Statements."
<TABLE>
<CAPTION>

NINE
MONTHS
TWELVE MONTHS ENDED
ENDED DECEMBER
MARCH 31, 31, YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------- ---------- --------------------------- -------------------------------
PRO FORMA PRO FORMA
1996(1) 1997(1) 1997(2) 1998(3) 1999 1999 1999 2000 2000
---------- -------- ------ ------- --------- ------- -------- -------- -------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales $ 244.9 $ 260.0 $ 374.2 $ 729.4 $ 864.1 $ $ 375.9 $ 449.2 $
Research and development (20.4) (20.5) (32.8) (67.9) (89.6) (42.3) (56.8)
expenses
Operating income (loss) 41.8 44.4 (36.3) 18.0 32.2 (2.9) 12.1
Net income (loss) 24.2 25.8 (36.1) (10.5) (6.3) 6.9 (5.6)
Earnings per share basic and $ 44.00 $ 46.91 $(49.63) $(19.80) $(16.20) $ $ 2.00 $(10.60) $
diluted

OTHER DATA:
EBITDA(4) $ 54.1 $ 56.9 $ (8.8) $ 83.6 $ 112.0 $ $ 34.1 $ 53.7 $
EBITDA, as adjusted(5) $ 54.1 $ 57.8 $ (4.6) $ 85.6 $ 112.9 $ $ 35.5 $ 63.5 $
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
----------------------
AS
ACTUAL ADJUSTED
--------- --------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA:
Total assets $1,208.7 $
Total borrowings 431.9
Redeemable cumulative preferred stock 128.4
Total stockholders' equity 326.3
</TABLE>

As adjusted amounts give effect to the reorganization, the issuance and
sale of shares of common stock by APBiotech in this offering at an assumed
initial public offering price of $ per share, the midpoint of the range set
forth on the cover page of this prospectus, and the application of the net
proceeds of this offering, after deducting estimated underwriting discounts and
commissions and offering expenses payable by us.

------------

(1) Represents financial data of Amersham Life Science, which was a fully
integrated division of Nycomed Amersham prior to the formation of
APBiotech.

(2) 1997 includes results of operations of Pharmacia Biotech from the date of
acquisition (August 1997) and non-recurring charges related to the
acquisition of $27.4 million which are included in cost of goods sold,
$18.0 million in purchased in-process research and development and $14.3
million in selling, general, and administrative expenses.

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(3) 1998 includes results of operations of Molecular Dynamics from the date of
acquisition (September 1998) and non-recurring charges of $7.0 million
which are included in cost of goods sold.

(4) EBITDA is earnings before interest, taxes, depreciation and amortization.
Due to the significant acquisitions we made in 1997 and 1998, which have
resulted in high levels of goodwill, we believe EBITDA is an appropriate
measure for investors to consider when analyzing our business. However,
EBITDA should not be considered in isolation by investors as an alternative
to operating income measures, as an indicator of our operating performance
or as an alternative to cash flows from operating activities as a measure
of our profitability or liquidity. EBITDA measures presented in this
prospectus may not be comparable to other similarly titled measures of
other companies. EBITDA is not a measure of financial performance under
generally accepted accounting principles. EBITDA may not be indicative of
the historic operating results, nor is it meant to be predictive of
potential future results.

(5) EBITDA, as adjusted consists of EBITDA as defined in (4) above, adjusted to
remove non-cash compensation expense related to employee stock options. Due
to the high levels of such non-cash expense related to employee stock
options, we believe this measure is appropriate for investors to consider
when analyzing our business. However, EBITDA, as adjusted should not be
considered in isolation by investors as an alternative to operating income
measures, as an indicator of our operating performance or as an alternative
to cash flows from operating activities as a measure of our profitability
or liquidity. EBITDA, as adjusted presented in this prospectus may not be
comparable to other similarly titled measures of other companies. EBITDA,
as adjusted is not a measure of financial performance under generally
accepted accounting principles. EBITDA, as adjusted may not be indicative
of the historic operating results, nor is it meant to be predictive of
potential future results.

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<PAGE> 12
RISK FACTORS

You should carefully consider the risks described below before making an
investment decision. The following risks relate to our business and to the
industry in which we operate, as well as the securities markets and ownership of
our common stock. The risks and uncertainties described below are not the only
ones facing our company. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.

Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of our
common stock could decline due to any of these risks and you may lose all or
part of your investment.

RISKS RELATED TO OUR BUSINESS

IF WE DO NOT KEEP UP WITH RAPID TECHNOLOGICAL CHANGE OR CONTINUE TO
INTRODUCE NEW PRODUCTS, WE MAY BE UNABLE TO MAINTAIN MARKET SHARE OR RECOUP
INVESTMENTS IN TECHNOLOGY.

Technologies in the life science industry have undergone and are expected
to continue to undergo rapid and significant change. We may not be able to keep
pace with the rapid rate of change and introduce new products that will
adequately meet the requirements of the marketplace or achieve market
acceptance. If we fail to introduce new and innovative products, we could lose
market share to our competitors and experience a reduction in our growth rate
and damage to our business.

Our future success will depend in large part on our ability to maintain a
competitive position with respect to these technologies. We believe successful
new product introductions provide a significant competitive advantage because
customers make an investment of time in selecting and learning to use a new
product, and are reluctant to switch to a competing product after making their
initial selection. However, we or others may make rapid technological
developments which could result in our technologies, products or services
becoming obsolete before we are able to recover the expenses incurred to develop
them.

IF WE DO NOT SUCCESSFULLY DISTINGUISH OUR PRODUCTS AND SERVICES FROM THOSE
OF OUR COMPETITORS, WE MAY BE UNABLE TO COMPETE SUCCESSFULLY TO GENERATE REVENUE
GROWTH.

Competition in the life science industry is intense, and we expect it to
increase. Rapid technological change and frequent new product introductions
characterize the markets we serve. For example, ultra high throughput drug
screening, single nucleotide polymorphism, or SNP, analysis and proteomics are
new technologies that are now widely used by researchers.

We compete with a variety of organizations that offer or are developing
products and services that are substantially similar to our products and
services. Many of the organizations competing with us have significant financial
and other resources to invest in new technologies, substantial intellectual
property portfolios, substantial experience in new product development,
regulatory expertise, manufacturing capabilities and the distribution channels
to deliver products to customers. Our inability to continue developing products
which distinguish us from our primary competitors could have an adverse impact
on our growth.

IF WE CANNOT ENTER INTO NEW STRATEGIC ALLIANCES OR LICENSING AGREEMENTS OR
MAINTAIN THE ONES THAT WE HAVE, WE MAY BE UNABLE TO COMMERCIALIZE OUR
TECHNOLOGIES AND DEVELOP NEW PRODUCTS AND SERVICES.

Our strategy of providing products to researchers working on a variety of
life sciences projects requires us to continually develop a wide spectrum of
products. To generate broad product lines, we believe that it is advantageous to
license technologies from the scientific community and to enter into strategic
alliances in addition to our own product development efforts. As a result, our
ability to license new technologies from third parties is and will

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<PAGE> 13
continue to be critical to our ability to offer new products. A significant
portion of our products are manufactured or sold using technology obtained
through licensing agreements or through strategic alliances. Under our current
strategy, and for the foreseeable future, we will remain dependent on licensing
agreements and strategic alliances to further our business.

We may be unable to maintain or expand existing strategic alliances or
establish additional alliances or licensing arrangements necessary to continue
to develop and commercialize products, and any of those arrangements may not be
on terms favorable to us. In addition, our current or any future arrangements
may ultimately not be successful. If we are unable to obtain or maintain any
third party license required to sell or develop our products or product
enhancements, we may choose to obtain substitute technology either through
licensing from another third party or by developing the necessary technology
ourselves. Any substitute technology may be of lower quality or may involve
increased cost, either of which could adversely affect our ability to provide
our products competitively and harm our business.

We also depend on collaborators for the development and manufacture of
complex instrument systems and chemicals and other materials that are used in
laboratory experiments and for development of software packages for analyzing
data produced by these instrument systems. We cannot control the amount and
timing of resources our collaborators devote to our products. We may not be able
to enter into these research collaborations and licensing agreements, which
would have an adverse effect on our business. For a discussion of our existing
collaborations you should read "Business -- Strategic Alliances."

IF WE PURSUE ACQUISITIONS IN THE FUTURE, THEY MAY ABSORB SIGNIFICANT
RESOURCES OR BE UNSUCCESSFUL.

As part of our strategic alliance strategy, we may pursue acquisitions,
investments and other relationships. Acquisitions may involve significant cash
expenditures, debt incurrence, additional operating losses, dilutive issuances
of equity securities, and expenses that could have a material adverse effect on
our financial condition and results of operations. For example, to the extent
that we elect to pay the purchase price for these acquisitions in shares of our
stock or other equity securities, this issuance of additional shares of stock or
other equity securities could be dilutive to our stockholders. Acquisitions may
involve numerous other risks, including:

- difficulties integrating acquired technologies and personnel into our
business;

- diversion of management focus from daily operations;

- inability to obtain required financing on favorable terms;

- entering new markets in which we have little or no previous
experience;

- potential loss of key employees or customers of acquired companies;

- inability to maintain uniform standards, controls, procedures and
policies; and

- assumption of the liabilities and exposure to unforeseen liabilities
of acquired companies.

It may be difficult for us to complete such transactions quickly and to
integrate such businesses efficiently into our current business. In addition, if
any transaction involves customer bases or businesses located outside the United
States, the transaction will involve the risks associated with international
operations. We may not be successful in overcoming these risks and our failure
to overcome these risks or other problems in these transactions could have a
negative impact on our business and financial condition.

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FLUCTUATIONS IN OUR OPERATING RESULTS COULD CAUSE THE PRICE OF OUR COMMON
STOCK TO DROP.

Our operating results may vary from period to period due to numerous
factors, many of which are outside our control, including the amount, timing and
market acceptance of new products that we or our competitors introduce. In
addition, our business is subject to seasonal fluctuations due to calendar year
budgeting for large capital items by customers, resulting generally in lower
levels of sales in the first quarter of each year and higher levels of sales in
the fourth quarter. Factors that may cause our results to vary by period
include:

- the volume and timing of orders for our products and services;

- changes in the mix of our products and services offered;

- the number, timing and significance of new products and services
introduced by our competitors;

- our ability to develop, market and introduce new and enhanced products
and services on a timely basis;

- changes in the cost, quality and availability of reagents and
components required to manufacture or use our products;

- the timing and costs of any acquisitions of businesses or
technologies; and

- the availability of commercial and government funding to researchers
who use our products and services.

Research and development costs associated with our technologies, products
and services, as well as personnel costs, marketing programs and overhead
account for a substantial portion of our operating expenses. We cannot adjust
these expenses quickly in the short term. If our revenues decline or do not grow
as anticipated, we may not be able to reduce our operating expenses accordingly.
Failure to achieve anticipated levels of revenue could therefore significantly
harm our operating results for a particular fiscal period. If our operating
results in some quarters fail to meet the expectations of securities analysts or
investors, the market price of our common stock is likely to fall.

FOREIGN CURRENCY FLUCTUATIONS COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.

Our products are currently marketed in over 120 countries throughout the
world. Our international revenues, which include revenues from our subsidiaries
in Europe, Japan, the Asia Pacific region and other regions outside of North
America, represented approximately 60% of our net sales during the past three
years. We expect that international revenues will continue to account for a
significant percentage of our revenues for the foreseeable future.

A significant portion of our business is conducted in currencies other than
the U.S. dollar, which is our reporting currency. We recognize foreign currency
gains or losses resulting from our operations in the period incurred. As a
result, currency fluctuations between the U.S. dollar and the other currencies
in which we do business have caused and will continue to cause foreign currency
transaction gains and losses. We cannot predict the effects of exchange rate
fluctuations on our future operating results because of the number of currencies
involved, the variability of currency exposures and the potential volatility of
currency exchange rates. In addition, we are subject to the legal and
administrative practices related to foreign exchange in the countries where we
operate, which could change. We engage in foreign exchange hedging transactions
to manage our foreign currency exposure, but our hedging strategies may not
adequately protect our operating results from the effects of exchange rate
fluctuations.

14
<PAGE> 15
THE INTERNATIONAL SCOPE OF OUR OPERATIONS MAY AFFECT OUR BUSINESS.

We face a number of risks because we conduct an international business,
including:

- exposure to general economic and political conditions in the markets
in which we operate;

- potential increased costs associated with overlapping tax structures;

- potential trade restrictions and exchange controls;

- more limited protection for intellectual property rights in some
countries;

- difficulties and costs associated with staffing and managing foreign
operations;

- uncertain effects of the movement in Europe to a unified currency;

- unexpected changes in regulatory requirements;

- difficulties in complying with a wide variety of foreign laws and
regulations;

- longer accounts receivable cycles in some foreign countries; and

- import and export licensing requirements.

Our inability to manage these risks could reduce our ability to offer our
products and services and generate revenues in the manner we expect.

IF PRODUCT LIABILITY CLAIMS ARE BROUGHT AGAINST US, THEY COULD ADVERSELY
AFFECT OUR BUSINESS.

We manufacture products that some of our customers use in the manufacture
of therapeutic products. This may expose us to potential secondary product
liability claims that arise out of the manufacture and sale of products used in
the testing, manufacturing, marketing and sale of therapeutic products. Our
general product liability insurance may not be sufficient to provide us with
adequate coverage against product liability claims. A product liability claim or
recall of a therapeutic product that contains our products could have a material
adverse effect on our business.

WE MAY NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE.

We believe that the net proceeds of this offering, together with existing
cash and marketable securities, anticipated cash flow from operations and
financing from Nycomed Amersham will be sufficient to fund our current plans to
expand our business. However, we may choose to accelerate our entry into new
businesses, in response to competitive pressures or otherwise, or to invest in
new technologies, or we may choose to raise additional capital due to market
conditions or strategic considerations even if we have sufficient funds for our
current operating plan. This additional financing may not be available when
needed, or, if available, may not be available on favorable terms. In addition,
Pharmacia has a veto right on our ability to issue new equity securities until
April 1, 2002. Failure to obtain additional financing, should the need for it
develop, could result in the delay or abandonment of any expansion of our
business. In addition, if we incur additional indebtedness, we may be subject to
restrictive financial covenants and the risk of increased leverage. If we obtain
additional financing through additional public or private equity offerings,
existing shareholders may suffer dilution.

15
<PAGE> 16
RISKS RELATED TO OUR INDUSTRY

USE OF GENOMICS INFORMATION TO DEVELOP OR COMMERCIALIZE PRODUCTS IS
UNPROVEN.

The development of new drugs and the diagnosis of disease based on genomic
information is unproven. Few therapeutic or diagnostic products based on genomic
discoveries have been developed and commercialized and, to date, no one has
developed or commercialized any therapeutic or diagnostic products based on our
genomic technologies. If our customers are unsuccessful in developing and
commercializing products based on our products or services, we and our customers
may be unable to generate sufficient revenues and our business may suffer as a
result. Development of genomics-based products will be subject to risks of
failure, in that such products:

- may be found to be toxic;

- may be ineffective;

- may fail to receive regulatory approvals;

- may fail to be developed prior to the successful marketing of similar
products by competitors; or

- may infringe on proprietary rights of third parties.

IF ETHICAL AND OTHER CONCERNS SURROUNDING THE USE OF GENETIC INFORMATION
BECOME WIDESPREAD, THERE MAY BE LESS DEMAND FOR OUR KEY PRODUCTS.

Genetic testing has raised ethical issues regarding confidentiality and the
appropriate use of the resulting information. For these reasons, governmental
authorities may call for limits on, or regulation of, the use of genetic
testing, or they may prohibit testing for genetic predisposition to certain
conditions, particularly for those that have no known cure. The development of
products based on the use of genetic information represents a significant market
opportunity for our Drug discovery business. Any of the scenarios mentioned
above could reduce the potential market for our products, which could seriously
harm our business.

REDUCTIONS IN RESEARCH AND DEVELOPMENT BUDGETS, CAPITAL SPENDING POLICIES
AND GOVERNMENT FUNDING MAY ADVERSELY IMPACT OUR SALES.

A significant portion of our products are capital purchases for our
customers. Our customers include pharmaceutical, biotechnology and agrochemical
companies, research institutes, universities and medical research centers.
Fluctuations in the research and development budgets or capital spending
policies of these organizations could have a significant effect on the demand
for our products. Research and development budgets and capital spending policies
fluctuate due to changes in available resources, spending priorities and
institutional budgetary policies. Our business could be seriously damaged by any
significant decrease in life sciences research and development expenditures by
pharmaceutical and biotechnology companies, academic institutions or government
and private laboratories.

A significant portion of our sales are to researchers, universities,
government laboratories and private foundations whose funding is dependent upon
both the level and timing of funding from government sources. Also, a portion of
our direct revenues comes from the National Institutes of Health, or NIH, Small
Business Innovation Research grant fund. As a result, the timing and amount of
revenues from these sources may vary significantly due to factors that can be
difficult to foresee. Although the level of research funding has increased
during the past several years, grants have, in the past, been frozen for
extended periods or have otherwise become unavailable to various institutions
without advance notice. Government funding of research and development is
subject to the political process, which is inherently unpredictable. Also,
government proposals aiming to reduce or eliminate budgetary deficits have
sometimes included reduced allocations to the NIH and other government agencies
that fund

16
<PAGE> 17
research and development activities. If researchers were not able to obtain, for
any extended period, government funding necessary to purchase our products or if
there is a decrease in overall research funding, it would adversely affect our
business.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

THE SCOPE OF OUR ISSUED PATENTS MAY NOT PROVIDE US WITH ADEQUATE PROTECTION
OF OUR INTELLECTUAL PROPERTY, WHICH WOULD HARM OUR COMPETITIVE POSITION.

Any issued patents that cover our proprietary technologies may not provide
us with substantial protection or be commercially beneficial to us. The issuance
of a patent is not conclusive as to its validity or its enforceability. The
United States federal courts or equivalent national courts or patent offices
elsewhere may invalidate our patents. In addition, third parties may have
patents of their own which could, if asserted, prevent us from protecting the
patented technologies we use in our business. Competitors may also be able to
design around our patents. If we are unable to protect our patented
technologies, we may not be able to commercialize our technologies, products or
services and our competitors could commercialize our technologies.

WE ARE INVOLVED IN PENDING INTELLECTUAL PROPERTY DISPUTES AND MAY IN THE
FUTURE BECOME INVOLVED IN SIMILAR DISPUTES REGARDING OUR PATENTS AND OTHER
INTELLECTUAL PROPERTY RIGHTS, WHICH COULD RESULT IN THE FORFEITURE OF THESE
RIGHTS, EXPOSE US TO SIGNIFICANT LIABILITY AND DIVERT MANAGEMENT'S FOCUS.

In order to protect or enforce our patent rights, we may need to initiate
patent litigation against third parties. In addition, we have been sued by third
parties alleging that we are infringing their intellectual property rights.
These lawsuits could be expensive, take significant time, and divert
management's focus from other business concerns. These lawsuits could result in
the invalidation or a limitation in the scope of our patents or forfeiture of
the rights associated with our patents. In addition, we may not prevail or a
court may find damages or award other remedies in favor of our opposing party in
any of these suits. During the course of these suits, there may be public
announcements of the results of hearings, motions and other interim proceedings
or developments in the litigation. Securities analysts or investors may perceive
these announcements to be negative, which could cause the market price of our
stock to decline.

We are currently involved in litigation with the PE Biosystems Group and
the Celera Genomics Group of PE Corporation regarding the infringement of
several patents. You should read "Business -- Legal Proceedings" for a
description of this litigation. We may not be successful in this litigation. An
adverse determination in, or settlement of this litigation could involve the
payment of significant monetary damages by us or could include terms in addition
to payment, such as a redesign of some of our products. These lawsuits, which
have been continuing for some time, are costly and will continue to require the
attention of some members of our management. Further, the existence of these
suits may damage our reputation and cause customers or potential customers to
question our ability to manufacture and deliver our products.

Many of our products are based on complex, rapidly-developing technologies.
These products could be developed without knowledge of previously filed but
unpublished patent applications that cover some aspect of these technologies.
Our industry has experienced intensive enforcement of intellectual property
rights by litigation and licensing. If we are found to be infringing the
intellectual property of others, we could be required to stop the infringing
activity, or we may be required to design around or license the intellectual
property in question. If we are unable to obtain a required license on
acceptable terms, or are unable to design around any third party patent, we may
be unable to sell some of our products and services, which could result in
reduced revenue.

17
<PAGE> 18
OTHER RIGHTS AND MEASURES THAT WE RELY UPON TO PROTECT OUR INTELLECTUAL
PROPERTY MAY NOT BE ADEQUATE TO PROTECT OUR PRODUCTS AND SERVICES AND COULD
AFFECT OUR ABILITY TO COMPETE.

In addition to patents, we rely on a combination of trade secrets,
copyrights and trademarks, nondisclosure agreements and other contractual
provisions and technical measures to protect our intellectual property rights.
While we require employees, collaborators, consultants and other third parties
to enter into confidentiality agreements where appropriate, any of the following
could still occur:

- the agreements may be breached;

- we may have inadequate remedies for any breach; or

- others may independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to our trade
secrets or disclose such technologies.

Monitoring the unauthorized use of our technology is difficult, and the
steps we have taken may not prevent unauthorized use of our technology. The
disclosure or misappropriation of our intellectual property for any of the above
reasons could harm our ability to protect our rights and our competitive
position.

RISKS RELATED TO THIS OFFERING AND THE COMMON STOCK

NYCOMED AMERSHAM AND PHARMACIA, OUR PRINCIPAL SHAREHOLDERS, MAY HAVE
INTERESTS THAT ARE ADVERSE TO YOURS.

After the completion of this offering, our two principal shareholders,
Nycomed Amersham and Pharmacia, will each control approximately 45% of our
outstanding voting stock. Nycomed Amersham may in the future, through
arrangements with Pharmacia, acquire additional shares of our common stock which
could result in it holding more than a majority of our shares. Nycomed Amersham
and Pharmacia will control the outcome of actions requiring the approval of our
shareholders and each will also be able to block those actions, because our
bylaws require shareholders voting two-thirds of our outstanding shares to
approve activities requiring shareholder approval. Our bylaws also provide,
subject to Nycomed Amersham and Pharmacia maintaining specified ownership
levels, that the composition of our board of directors will consist of six
directors appointed by Nycomed Amersham, two directors appointed by Pharmacia
and three independent directors. Nycomed Amersham will continue to consolidate
us in its group through its control of our board of directors. Nycomed Amersham
intends to continue to allow our current management to conduct our business and
operations as we have done in the past, but could institute a new business plan
in the future. Pharmacia also has a veto right on our ability to issue new
equity securities until April 1, 2002. In addition, through several intra-group
facilities and a letter of support, as well as the committed loan facility into
which we intend to enter after the completion of this offering, Nycomed Amersham
and Pharmacia are our major creditors and will remain so after this offering.
The interests of Nycomed Amersham and Pharmacia may conflict with the interests
of other holders of common stock. See "Relationship with Nycomed Amersham and
Pharmacia."

Our certificate of incorporation includes provisions relating to
competition by Nycomed Amersham and Pharmacia with us, allocations of corporate
opportunities and provisions limiting the liability of our directors. Our
certificate of incorporation provides that any person purchasing or acquiring an
interest in shares of our capital stock will be deemed to have consented to the
provisions in the certificate of incorporation relating to competition with
Nycomed Amersham and Pharmacia, conflicts of interest, corporate opportunities
and intercompany agreements. This consent may restrict a shareholder's ability
to challenge transactions carried out in compliance with these provisions. Our
directors and/or officers who are also directors and/or officers of Nycomed
Amersham and Pharmacia may choose to take action that might not be viewed as
favorable to us in reliance on those provisions.

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<PAGE> 19
ANTI-TAKEOVER MEASURES COULD DELAY OR PREVENT A CHANGE IN CONTROL OF
APBIOTECH, WHICH COULD CAUSE THE SHARE PRICE OF OUR COMMON STOCK TO DROP.

Our certificate of incorporation, bylaws, Delaware law and arrangements
between our principal shareholders will make it substantially more difficult for
a third party to acquire control of APBiotech without the approval of our board
of directors. These provisions could discourage potential takeover attempts that
our other shareholders consider to be in their best interest and could adversely
affect the market price of our common stock. For more information, you should
read "Description of Capital Stock -- Certain Provisions of APBiotech's
Certificate of Incorporation and Bylaws" and " -- Certain Anti-Takeover Effects
of Delaware Law."

YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT IF THE MARKET PRICE OF OUR
COMMON STOCK FALLS BELOW THE INITIAL PUBLIC OFFERING PRICE.

Prior to this offering, there has been no public market for our common
stock. The initial public offering price will be determined through negotiations
between us and the underwriters. The initial public offering price may bear no
relationship to the price at which the common stock will trade after the
completion of this offering. An active or liquid public market for our common
stock may not develop or be sustained after this offering, and the market price
could fall below the initial public offering price. As a result, you could lose
all or part of your investment.

The trading price of our common stock is likely to be highly volatile and
could be subject to wide fluctuations in price in response to various factors,
many of which are beyond our control, including:

- actual or anticipated fluctuations in our operating results;

- changes in expectations as to our future financial performance or
changes in financial estimates of market analysts;

- the operating and stock price performance of other comparable
companies;

- conditions or trends in the biotechnology, pharmaceutical and genomics
industries;

- announcements by us of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;

- announcements of technological innovations or new commercial products
by us or our competitors;

- developments concerning proprietary rights, including patents;

- regulatory developments in the United States and foreign countries;

- public concern as to the safety of biotechnology products; and

- additions or departures of key personnel.

In addition, the stock market in general, the Nasdaq National Market and
the market for biotechnology companies in particular, have experienced extreme
price and volume fluctuations that have often been unrelated or disproportionate
to the operating performance of those companies. These broad market and industry
factors may significantly affect the market price of our common stock,
regardless of our operating performance. You should read the "Underwriters"
section for a more complete discussion of the factors to be considered in
determining the initial public offering price.

19
<PAGE> 20
YOU WILL SUSTAIN SUBSTANTIAL DILUTION OF THE NET TANGIBLE BOOK VALUE OF THE
COMMON STOCK YOU PURCHASE IN THIS OFFERING.

The initial public offering price is substantially higher than the net
tangible book value per share of the outstanding common stock immediately after
this offering. Accordingly, if you purchase common stock in this offering, you
will incur immediate dilution of approximately $ in the net tangible book value
per share of common stock from the price you pay for the common stock. For
additional information you should read "Dilution."

ABSENCE OF DIVIDENDS COULD REDUCE OUR ATTRACTIVENESS TO INVESTORS.

Some investors favor companies that pay dividends, particularly during
market downturns. We currently intend to retain any future earnings for funding
growth and, therefore, we do not anticipate paying cash dividends on our common
stock in the foreseeable future. Because we may not pay dividends, your return
on this investment likely depends on your selling our stock at a profit. For
additional information, you should read "Dividends."

FUTURE SALES BY OUR PRINCIPAL SHAREHOLDERS MAY ADVERSELY AFFECT THE PRICE
OF OUR COMMON STOCK AND OUR ABILITY TO RAISE FUNDS IN NEW STOCK OFFERINGS.

Sales of a substantial number of shares of our common stock in the public
market following this offering could adversely affect the market price of our
common stock. Any adverse impact on our share price may also make it more
difficult for us to sell equity securities or equity-related securities in the
future at a time and price that our management deems acceptable, or at all.

We, Nycomed Amersham, Pharmacia and our directors and officers have agreed,
pursuant to lock-up agreements, not to sell any shares of common stock for a
period of 180 days after the date of this prospectus without the prior written
consent of the underwriters.

180 days after the date of the reorganization, Nycomed Amersham and
Pharmacia will be entitled to registration rights with respect to the shares of
our common stock held by them. Upon registration, these shares may be freely
sold in the public market. You should read "Shares Eligible for Future Sale" for
more information.

20
<PAGE> 21
FORWARD-LOOKING STATEMENTS

Some of the information in this prospectus including the above "Risk
Factors" section, contains forward-looking statements that involve substantial
risks and uncertainties. You can identify these statements by forward-looking
words such as "may," "will," "expect," "anticipate," "believe," "estimate,"
"project," and "continue" or similar words. You should read statements that
contain these words carefully because they:

- discuss our future expectations;

- contain projections of our future results of operations or of our
financial condition;

- state other "forward-looking" information.

We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
predict accurately or over which we have no control. The risk factors listed
above, as well as any cautionary language in this prospectus, provide examples
of risks, uncertainties and events that may cause our actual results to differ
materially from the expectations we describe in our forward-looking statements.
Before you invest in our common stock, you should be aware that the occurrence
of the events described in these risk factors and elsewhere in this prospectus
could have a material adverse effect on our business, operating results and
financial condition. Except as otherwise required by federal securities laws, we
have no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, changed circumstances or any other
reason after the date of this prospectus.

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<PAGE> 22
USE OF PROCEEDS

We will receive net proceeds from this offering of about $ million, or
about $ million if the underwriters exercise their over-allotment option in
full. We will use a portion of the proceeds for general corporate purposes,
primarily to fund our operations. Approximately $ million will be used to
repay indebtedness owed to Nycomed Amersham, at an average interest rate of .
To date and for the foreseeable future, we have received and expect to continue
to receive funding for our operations through intercompany loans from Nycomed
Amersham. Any remaining proceeds will be deposited with Nycomed Amersham on
market terms, available to us on demand when needed for the operation of our
business, which may include the making of acquisitions or investments in
complementary technologies, products or businesses. Except as otherwise
disclosed in this prospectus, we currently do not have any material commitments
or agreements for any acquisitions or investments.

DIVIDENDS

We have never declared or paid any cash dividends on our capital stock. We
do not anticipate that our policy will change when our shares become publicly
traded. We currently anticipate that we will retain all available funds for use
in the operation and expansion of our business, and do not anticipate paying any
cash dividends in the foreseeable future.

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<PAGE> 23
CAPITALIZATION

The following table sets forth our cash and cash equivalents, short-term
debt and our total capitalization as of June 30, 2000, as adjusted to reflect
the reorganization and as further adjusted to give effect to our sale of shares
of common stock in this offering at an assumed initial public offering price of
$ per share. Our actual long-term debt includes $ million of indebtedness
owed to Nycomed Amersham. When adjusted for the reorganization and this
offering, our long-term debt will include $ million of indebtedness owed to
Nycomed Amersham. This table should be read in conjunction with the consolidated
financial statements and notes to those financial statements appearing elsewhere
in this prospectus.

AS OF JUNE 30, 2000
----------------------------------------
AS ADJUSTED AS ADJUSTED
FOR THE FOR THIS
ACTUAL REORGANIZATION OFFERING
-------- -------------- ----------
(IN MILLIONS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Cash and cash equivalents .......................................... $ 27.5
Short-term debt .................................................... 418.3
======= ======== =======
Long-term debt ..................................................... 13.6
Redeemable cumulative preferred stock, $1.62 par value per share,
67,916,327 shares issued and outstanding ........................ 128.4
Stockholders' equity:
Common stock, $1.62 par value per share, 1,000,000 shares
authorized, issued and outstanding .............................. 1.6
Common stock, $ par value per shares authorized;
shares outstanding, actual; shares outstanding, as adjusted ..... --
Class B common stock, $ par value per shares
authorized; shares outstanding, actual; shares
outstanding, as adjusted ........................................ --
Additional paid-in capital ...................................... 448.1
Retained deficit ................................................... (106.8)
Unearned compensation expense ...................................... (11.7)
Accumulated other comprehensive (loss) ............................. (4.9)
-------
Total stockholders' equity ...................................... 326.3 $
------- -------- -------
Total capitalization .......................................... $ 468.3 $ $
======= ======== =======
</TABLE>

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<PAGE> 24
DILUTION

Our pro forma net tangible book value (deficit) as of June 30, 2000 was
$( ), or $( ) per share of common stock. Pro forma net tangible book value
per share is determined by dividing our tangible net worth, total assets less
total liabilities, by the aggregate number of shares of common stock
outstanding. After giving effect to the reorganization and our sale of the
shares of common stock in this offering, at an assumed initial public offering
price of $ per share, and the receipt and application of the net proceeds
from this offering, our pro forma net tangible book value at June 30, 2000
would have been $ or $ per share. This represents an immediate increase in
pro forma net tangible book value to existing shareholders of $ per share and
an immediate dilution to new investors of $ per share. The following table
illustrates this per share dilution:

<TABLE>
<S> <C>
Assumed initial public offering price ................................................ $
Pro forma net tangible book value deficit per share as of June 30, 2000 ...........
Increase in pro forma net tangible book value per share
attributable to this offering .....................................................
Pro forma net tangible book value per share after offering ...........................
----------
Dilution in the pro forma net tangible book value per share to new investors ......... $
==========
</TABLE>

The following table sets forth, on a pro forma basis, as of June 30, 2000,
the number of shares of common stock purchased, the total consideration paid, or
to be paid, and the average price per share paid, or to be paid, by our existing
shareholders and by the new investors in this offering, at an assumed initial
public offering price of $ per share, before deducting estimated underwriting
discounts and commissions and offering expenses payable by us:
<TABLE>
<CAPTION>

SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- --------------------- PRICE
NUMBER % AMOUNT ($) % PER SHARE ($)
--------- --------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Existing shareholders ........................ % $ %
New investors ................................
--------- --------- ---------- --------
Total ........................................ 100% $ 100%
</TABLE>

The foregoing tables assume no exercise of the underwriters' over-allotment
option.

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<PAGE> 25
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

The unaudited pro forma condensed financial statements set forth below
consist of an unaudited pro forma condensed balance sheet as of June 30, 2000
and an unaudited pro forma condensed statement of operations for the year ended
December 31, 1999 and the six months ended June 30, 2000.

The unaudited pro forma condensed balance sheet has been prepared assuming
that Nycomed Amersham and Pharmacia have made an additional capital contribution
to us of $151 million, the proceeds of which we used to repay a portion of the
amounts due under the uncommitted credit facility with Nycomed Amersham, and
that the 8% redeemable cumulative preferred stock, all of which is held by
Nycomed Amersham and Pharmacia, have been converted into shares of our common
stock. The "Pro Forma As Adjusted" amounts assume that Nycomed Amersham and
Pharmacia, except for its German subsidiary's retained interest in APBiotech
Ltd, have converted their interests in APBiotech Ltd. into interests in
APBiotech Inc and that APBiotech Inc has issued a 20-year note to Nycomed
Amersham in an amount equivalent to the expected net proceeds from this
offering. The "Pro Forma As Adjusted" amounts do not include the effect of this
offering or the use of proceeds from this offering.

The unaudited pro forma condensed statements of operations have been
prepared assuming that the additional capital contribution from Nycomed Amersham
and Pharmacia, the conversion of our 8% redeemable cumulative preferred stock,
and the remainder of the reorganization occurred on January 1, 1999.

The unaudited pro forma condensed balance sheet is not intended to
represent what our financial position would have been had these events occurred
on June 30, 2000, or to project our financial position for any future date.
Similarly, the unaudited pro forma condensed statements of operations are not
intended to represent what our operating results would actually have been for
the periods indicated or to project our operating results for any future period.
The pro forma adjustments are based on currently available information and
certain assumptions that our management believes are reasonable. These unaudited
pro forma condensed financial statements should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and notes included in this
prospectus.

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<PAGE> 26
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

As of June 30, 2000

Property, plant, and ........ 230.3 -- -- 230.3 -- --
equipment, net
Intangible assets, net ...... 493.6 -- -- 493.6 -- --
Other non-current assets .... 43.0 -- -- 43.0 -- --
---------- -------- -------- ---------- ------- ------
Total assets ................. $ 1,208.7 $ -- $ -- $ 1,208.7 $ -- $ --
========== ======== ======== ========== ======= ======
Liabilities and Stockholders'
Equity:
Current liabilities:
Short-term debt ............. $ 418.3 $ (151.0)(A) -- $ 267.3 $ -- $ --
Accounts payable ............ 39.6 -- -- 39.6 -- --
Accrued expenses ............ 87.6 -- -- 87.6 -- --
Other current liabilities ... 71.2 -- -- 71.2 -- --
---------- -------- -------- ---------- ------- ------
Total current liabilities ..... 616.7 (151.0) -- 465.7 -- --

Long-term debt .............. 13.6 -- -- 13.6 --(C) --
Employee benefit
obligations ................ 58.9 -- -- 58.9 -- --

Other non-current
liabilities ................ 64.8 -- -- 64.8 --(C) --
---------- -------- -------- ---------- ------- ------
Total liabilities ............. 754.0 (151.0) -- 603.0 -- --

Convertible preferred stock ... 128.4 -- (128.4)(B) -- -- --

Stockholders' equity:
Common stock and additional
paid-in capital ............ 449.7 151.0(A) 128.4 (B) 729.1 --(C) --
Retained deficit ............ (106.8) -- -- (106.8) -- --
Unearned compensation
expense .................... (11.7) (11.7)

Accumulated other
comprehensive income (loss) .. (4.9) -- -- (4.9) -- --
---------- -------- -------- ---------- ------- ------
Total stockholders' equity .... 326.3 151.0 128.4 605.7 -- --

Total liabilities and
stockholders' equity ........ $ 1,208.7 $ -- $ -- $ 1,208.7 $ -- $ --
========== ======== ======== ========== ======= ======
</TABLE>

26
<PAGE> 27
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2000

ADJUSTMENTS ADJUSTMENTS PRO
FOR ADJUSTMENTS FOR FOR THE FORMA
CAPITAL PREFERRED STOCK REMAINDER OF THE AS
ACTUAL CONTRIBUTION CONVERSION PRO FORMA REORGANIZATION ADJUSTED
------------ ------------ --------------- --------- ----------------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Net sales ................... $ 449.2 $ -- $ -- $ 449.2 $ -- $ --
Cost of goods sold .......... (194.1) -- -- (194.1) -- --
--------- ------ ------- -------- --------- ------
Gross profit .............. 255.1 -- -- 255.1 -- --
Selling, general and
administrative expenses ... (186.1) -- -- (186.1) -- --
Research and development
expenses .................. (60.0) -- -- (60.0) -- --
Other operating income
(expense), net ............ 3.1 -- -- 3.1 -- --
--------- ------ ------- -------- --------- ------
Operating income .......... 12.1 -- -- 12.1 -- --
Interest income ............. 0.8 -- -- 0.8 -- --
Interest expense ............ (13.8) 3.9(D) -- (9.9) --(F) --
--------- ------ ------- -------- --------- ------
Income before taxes and
minority interest ......... (0.9) 3.9 -- 3.0 -- --
Minority interest, net of
tax ....................... (0.2) -- -- (0.2) --(G) --
Provision for income taxes .. (4.5) (1.4)(E) -- (5.9) --(H) --
--------- ------ ------- -------- --------- ------
Net income .................. $ (5.6) $ 2.5 $ -- $ (3.1) $ -- $ --
========== ====== ======= ======== ========= ======
Earnings per share basic and
diluted .................. $ (10.60) -- -- $ -- -- $ --
========== ====== ======= ======== ========= ======
</TABLE>

27
<PAGE> 28
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999

Selling, general and
administrative expenses ... (354.1) -- -- (354.1) -- --
Research and development
expenses .................. (89.6) -- -- (89.6) -- --
Other operating income
(expense), net ............ (1.2) -- -- (1.2) -- --
---------- ------ ------ -------- ------ ------
Operating income .......... 32.2 -- -- 32.2 -- --

Interest income ............. 3.2 -- -- 3.2 -- --
Interest expense ............ (24.1) 8.1(I) -- (16.0) --(K) --
---------- ------ ------ -------- ------ ------
Income before taxes and
minority interest ........ 11.3 8.1 -- 19.4 -- --

Minority interest, net
of tax ..................... (0.5) -- -- (0.5) --(L) --
Provision for income taxes .. (17.1) (2.8)(J) -- (19.9) --(M) --
---------- ------ ------ -------- ------ ------
Net income (loss) ........... $ (6.3) $ 5.3 $ -- $ (1.0) $ -- $ --
========== ====== ====== ======== ====== ======
Earnings per share basic and
diluted ................... $ (16.20) -- -- $ -- -- $ --
========== ======== =======
</TABLE>

28
<PAGE> 29
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

(A) Reflects an additional capital contribution of $151 million from Nycomed
Amersham ($83 million) and Pharmacia ($68 million) and the use of those
proceeds to repay amounts due under the existing uncommitted credit
facility with Nycomed Amersham.

(B) Reflects the conversion of all outstanding 8% redeemable convertible
preferred stock, including accrued dividends, all of which is held by
Nycomed Amersham ($70.6 million) and Pharmacia ($57.8 million).

(C) Reflects the exchange by Pharmacia of a 39.4% interest in APBiotech Ltd.
for a 39.4% interest in APBiotech Inc, the exchange by Nycomed Amersham of
a 55% interest in APBiotech Ltd. for a 45% interest in APBiotech Inc, the
issuance by APBiotech Inc of a 20 year note with a principal amount of
$ to Nycomed Amersham, and the establishment of minority interest for
the 5.6% direct interest in APBiotech Ltd. retained by Pharmacia's German
subsidiary. The aggregate amount of the notes was determined based on the
expected net proceeds of this offering of $ , assuming the mid-point
of the offering range. The minority interest was determined using 5.6%
of APBiotech Ltd.'s retained deficit.

(D) Reflects the reduction in interest on existing debt outstanding under the
uncommitted credit facility with Nycomed Amersham as if the proceeds from
the additional capital contribution in (A) above had been received on
January 1, 1999. The interest savings were computed using the $151 million
in proceeds at the average borrowing rate of 5.2% for the first six months
of 2000 under the Nycomed Amersham facility. The effect of a 0.125% change
in the interest rate would be a change in the adjustment to interest
expense of $0.1 million.

(E) Reflects incremental tax on the higher pre-tax income as a result of the
reduced interest expense in (C) above. The additional tax expense was
computed using the interest savings of $3.8 million at the federal
statutory tax rate of 35%.

(F) Reflects interest expense on the long-term notes issued to Nycomed
Amersham computed using the expected proceeds of $ , based on the
mid-point of the range, and a blended average interest rate of %, based
on the terms of the notes and APBiotech Inc's credit rating. The effect of
a 0.125% change in the blended average interest rate would be a change in
the adjustment to interest expense of $ .

(G) Reflects the minority interest for the 5.6% interest in APBiotech Ltd.
held directly by Pharmacia's German subsidiary.

(H) Reflects a reduction in tax expense due to lower pre-tax income as a
result of the additional interest expense in (F) above. The reduction in
tax expense was computed using the interest expense of $ at the U.S.
federal statutory tax rate of 35%.

(I) Reflects the reduction in interest on existing debt outstanding under the
uncommitted credit facility with Nycomed Amersham as if the proceeds from
the additional capital contribution in (A) above had been received on
January 1, 1999. The interest savings were computed using the $151 million
in proceeds at the average borrowing rate of 5.4% for 1999 under the
Nycomed Amersham facility. The effect of a 0.125% change in the interest
rate would be a change in the adjustment to interest expense of $0.2
million.

(J) Reflects incremental tax on the higher pre-tax income as a result of the
reduced interest expense in (C) above. The additional tax expense was
computed using the interest savings of $8.1 million at the federal
statutory tax rate of 35%.

(K) Reflects interest expense on the long-term notes issued to Nycomed
Amersham computed using the expected proceeds of $ , based on the
mid-point of the range, and a blended average interest rate of %, based
on the terms of the

29
<PAGE> 30
notes and APBiotech Inc's credit rating. The effect of a 0.125% change in
the blended average interest rate would be a change in the adjustment to
interest expense of $ .

(L) Reflects the minority interest for the 5.6% interest in APBiotech Ltd.
held directly by Pharmacia's German subsidiary.

(M) Reflects a reduction in tax expense due to lower pre-tax income as a
result of the additional interest expense in (K) above. The reduction in
tax expense was computed using the interest expense of $ at the U.S.
federal statutory tax rate of 35%.

30
<PAGE> 31
SELECTED CONSOLIDATED FINANCIAL DATA

The following summary consolidated financial data of APBiotech Ltd. as of
December 31, 1998 and 1999, and as of and for the nine months ended December 31,
1997 and the years ended December 31, 1998 and 1999 have been derived from
consolidated financial statements, included in this prospectus. The consolidated
financial statements have been audited by PricewaterhouseCoopers LLP,
independent accountants. The summary consolidated financial data of Amersham
Life Science, a predecessor to APBiotech Ltd, as of and for the twelve months
ended March 31, 1996 and 1997, have been derived from unaudited consolidated
financial statements. The summary historical consolidated financial data of
APBiotech Ltd. as of June 30, 2000 and as of and for the six months ended June
30, 1999 and 2000, have been derived from unaudited interim consolidated
financial statements, which, in our opinion, reflect all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of our
results of operations for the unaudited interim periods. Results for the six
months ended June 30, 2000 are not necessarily indicative of results that may be
expected for the entire year. The financial data set forth below should be read
together with "Unaudited Pro Forma Condensed Financial Statements,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and notes included in this
prospectus.
<TABLE>
<CAPTION>
TWELVE MONTHS NINE MONTHS YEAR ENDED SIX MONTHS ENDED
ENDED ENDED DECEMBER JUNE
MARCH 31, DECEMBER 31, 31, 30,
--------------------- ------------ ------------------ -------------------
1996(1) 1997(1) 1997(2) 1998(3) 1999 1999 2000
--------- ------- ------------ ------- -------- -------- -------
(UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales .......................... $ 244.9 $ 260.0 $ 374.2 $ 729.4 $ 864.1 $ 375.9 $ 449.2
Research and development expenses .. (20.4) (20.5) (32.8) (67.9) (89.6) (42.3) (56.8)
Operating income (loss) ............ 41.8 44.4 (36.3) 18.0 32.2 (2.9) 12.1
Net income (loss) .................. 24.2 25.8 (36.1) (10.5) (6.3) 6.9 (5.6)
Earnings per share basic and
diluted ........................... $ 44.00 $ 46.91 $(49.63) $(19.80) $(16.20) $ 2.00 $(10.60)

OTHER DATA:
EBITDA(4) .......................... $ 54.1 $ 56.9 $ (8.8) $ 83.6 $ 112.0 $ 34.1 $ 53.7
EBITDA, as adjusted(5) ............. $ 54.1 $ 57.8 $ (4.6) $ 85.6 $ 112.9 $ 35.5 $ 63.5
</TABLE>
<TABLE>
<CAPTION>

AS OF MARCH 31, AS OF DECEMBER 31, AS OF JUNE 30,
--------------- -------------------------------- -------------
1996 1997 1997 1998 1999 2000
-------- -------- -------- ---------- ---------- -------------
(UNAUDITED) (IN MILLIONS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets ........................ $ 229.3 $ 246.7 $ 908.5 $ 1,226.2 $ 1,249.3 $ 1,208.7
Total borrowings .................... 9.9 10.3 152.3 370.2 410.3 431.9
Redeemable cumulative preferred
stock ............................. -- -- 115.7 125.7 132.5 128.4
Total stockholders' equity .......... 144.6 165.4 366.3 341.0 335.3 326.3
</TABLE>

--------------

(1) Represents financial data of Amersham Life Science, which was a fully
integrated division of Nycomed Amersham prior to the formation of
APBiotech.

(3) 1998 includes results of operations of Molecular Dynamics from the date of
acquisition (September 1998) and non-recurring charges of $7.0 million
which are included in cost of goods sold.

31
<PAGE> 32
(4) EBITDA is earnings before interest, taxes, depreciation and amortization.
Due to the significant acquisitions we made in 1997 and 1998, which have
resulted in high levels of goodwill, we believe EBITDA is an appropriate
measure for investors to consider when analyzing our business. However,
EBITDA should not be considered in isolation by investors as an alternative
to operating income measures, as an indicator of our operating performance
or as an alternative to cash flows from operating activities as a measure
of our profitability or liquidity. EBITDA measures presented in this
prospectus may not be comparable to other similarly titled measures of
other companies. EBITDA is not a measure of financial performance under
generally accepted accounting principles. EBITDA may not be indicative of
the historic operating results, nor is it meant to be predictive of
potential future results.

32
<PAGE> 33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

The following management's discussion and analysis should be read with the
"Selected Consolidated Financial Data" and our consolidated financial statements
and related notes included elsewhere in this prospectus. The discussion in this
prospectus contains forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. The cautionary statements made in this prospectus should be read as
applying to all related forward-looking statements wherever they appear in this
prospectus. Our actual results could differ materially from those discussed
here. Factors that could cause or contribute to these differences include those
discussed in "Risk Factors," as well as those discussed elsewhere.

OVERVIEW

COMPANY BACKGROUND

General. We are a leading global provider of biotechnology systems,
products and services for research into genes and proteins, for the discovery
and development of drugs, and for the manufacture of drugs based on biological
molecules, also known as biopharmaceuticals.

Operating segments. We manage our business along three principal business
segments: Drug discovery, Separations and Laboratory products. In addition to
these principal segments we have Service and Agency businesses which are
included in the Service, agency and other segment.

- Drug discovery - this business provides high throughput systems to
improve the effectiveness of pharmaceutical research and development
and speed to market for drugs. Principal products in this business are
the MegaBACE and LEADseeker systems.

- Separations - this business provides systems for the purification and
production of biopharmaceuticals on a large scale and for separating
proteins at a laboratory scale. Products in this business include
Sepharose, a leading brand of separation media.

- Laboratory products - this business provides tools and technical
knowledge for the purification, detection, and analysis of biological
molecules by life science researchers. Our broad range of products
include low throughput sequencing systems and reagents, scanning and
electrophoresis systems, molecular biology systems, reagents for
protein analysis and radiochemicals.

- Service, agency and other - this business includes our Service and
Agency businesses and other miscellaneous businesses. Our Service
business is responsible for the installation, where appropriate, of
instruments and systems which are sold by the three principal
businesses and provides servicing on the instruments and systems
during the warranty period. The cost of these services is generally
not recharged to the businesses. The Service business also generates
income from contracts with customers to provide technical support for
instruments and systems as well as scientific support to assist the
customer in maximizing the effectiveness of the instruments and
systems in research. In addition, we sell certain products under
agency agreements which complement our existing product range. Due to
their relative sizes, the Service and Agency businesses have been
aggregated, with income from royalty agreements and charges to
customers for product delivery, which are not attributed to the
principal businesses for management purposes.

Prior to August 5, 1997, we operated as Amersham Life Science, a fully
integrated division of Nycomed Amersham plc. On August 5, 1997, Amersham Life
Science was established as a separate legal entity in the form of APBiotech
Ltd., and we merged our operations with those of Pharmacia Biotech, when
Pharmacia sold the capital stock of Pharmacia Biotech to us. The transaction was
accounted for under the purchase method of accounting.
See "Events Impacting Comparability."

33
<PAGE> 34
Prior to January 2000, we did not operate, manage our operations, or
accumulate financial information based on the business segmentation described
above. As such, the results of operations for the businesses for 1997, 1998, and
1999 have been presented using our best estimates of the allocation of costs to
the businesses in those years. We consider these allocations to be reasonable.
However, the reported results of operations of the businesses may differ from
those that may have been achieved had we managed the businesses in this manner
in 1997, 1998, and 1999.

REORGANIZATION

In order to facilitate our initial public offering, our principal
shareholders have agreed to reorganize their existing shareholdings in APBiotech
Ltd. by organizing us to become the holding company for APBiotech Ltd. and
exchanging their shares in APBiotech Ltd. for our shares, although Pharmacia
will retain 5.6% of APBiotech Ltd.'s ordinary stock. Our principal shareholders
have also agreed to revised governance arrangements and certain other
arrangements more fully described under "Relationship with Nycomed Amersham and
Pharmacia."

To facilitate our initial public offering our principal shareholders are
also taking the following steps:

- Contributing additional capital. Nycomed Amersham and Pharmacia will
make an additional capital contribution of approximately pound
sterling 100 million, to be contributed 55% by Nycomed Amersham and
45% by Pharmacia. Nycomed Amersham and Pharmacia will receive shares
of APBiotech Ltd's common stock in exchange for their contributions.

- Converting redeemable cumulative preferred shares. Nycomed Amersham
and Pharmacia, as holders of APBiotech Ltd.'s 8% redeemable cumulative
preferred shares, will convert all of the outstanding preferred shares
into shares of the common stock of APBiotech Ltd.

- Receiving shares in exchange for APBiotech Ltd. equity securities.
Nycomed Amersham will exchange its 55% ownership in APBiotech Ltd. for
common stock representing approximately 45% of the voting rights in
our outstanding common stock and three long-term notes equal to the
value of the shares expected to be sold in this offering. The notes
will mature in 20 years and one will carry a floating market interest
rate and two will carry a fixed market interest rate. Pharmacia will
exchange its 45% ownership in APBiotech Ltd. for Class B common stock
representing approximately 45% of the voting rights in our outstanding
common stock.

Each of the foregoing steps will be implemented just prior to the closing
of this offering.

For a complete description of our capital structure subsequent to the
reorganization, you should read "Capitalization" and "Unaudited Pro Forma
Condensed Financial Statements."

On September 28, 2000, our principal shareholders entered into a letter of
support with us in which they agreed to make loans or capital contributions, if
alternative sources of financing were unavailable, to enable us to pay our debts
when due if we were otherwise unable to do so. It is our intention to enter into
a committed long-term loan facility subsequent to our completion of this
offering to replace our existing facility with Nycomed Amersham which is
currently payable on demand.

REVENUE RECOGNITION

We recognize revenue principally on four types of transactions:

- sales of consumable products;

- sales of equipment;

34
<PAGE> 35
- agreements which provide access to or license of certain of our
proprietary technology and know-how; and

- contracts for ongoing service and support of equipment sold to
customers.

We record revenues net of any estimated provisions for returns and
allowances and other price adjustments.

We recognize revenue on sales of equipment in the United States and on
sales of consumable products in all markets upon transfer of title and risk of
loss to the customer, generally upon payment in full by the customer for
equipment in the United States and upon delivery of consumable products in all
markets. In markets outside of the United States, sales of equipment are made
with a reservation of title until payment in full by the customer for the
equipment. For these sales, we recognize revenue upon delivery of the product
and transfer of risk of loss to the customer, as our reservation of title is
solely for credit protection purposes. We recognize revenues earned under
agreements which provide access to or license of our proprietary technology and
know-how over the term of the respective agreement. We recognize revenues earned
under contracts for ongoing service pro rata over the term of the service
agreements.

On December 3, 1999, the staff of the Securities and Exchange Commission
issued Staff Accounting Bulletin 101, or SAB 101, "Revenue Recognition in
Financial Statements," which summarizes the staff's interpretations of the
application of Generally Accepted Accounting Principles to revenue recognition.
We have adopted SAB 101 for all periods presented.

EVENTS IMPACTING COMPARABILITY

Set out below are events which impact the comparability of reported
financial information between the periods presented, primarily related to the
impact of the Pharmacia Biotech transaction on August 5, 1997 and our
acquisition of Molecular Dynamics on September 11, 1998.

ACQUISITIONS

Pharmacia Biotech. On August 5, 1997, we merged our operations with those
of Pharmacia Biotech when Pharmacia sold the capital stock of Pharmacia Biotech
to us in exchange for common and preferred shares of APBiotech Ltd. valued at
approximately $450 million. We accounted for the transaction under the purchase
method of accounting and accordingly, we have included the results of Pharmacia
Biotech in our financial statements beginning on August 5, 1997.

Acquired intangibles of $22.8 million are being amortized on a
straight-line basis over periods from 7 to 10 years and the residual goodwill of
approximately $302.7 million is being amortized on a straight-line basis over 20
years.

In connection with the transaction in 1997, we recorded non-recurring
charges of $27.4 million in cost of goods sold to write-off the fair value
adjustment to inventory and $18.0 million for purchased in-process research and
development.

Molecular Dynamics Inc. On September 11, 1998, we acquired the remaining
91% of the outstanding capital stock of Molecular Dynamics Inc. that we did not
previously own for a total purchase price of $204.7 million. We accounted for
the acquisition under the purchase method of accounting and accordingly, we have
included the results of Molecular Dynamics in our financial statements beginning
on September 11, 1998.

Acquired intangibles of $120.0 million are being amortized on a
straight-line basis over 10 years and the residual goodwill of approximately
$98.6 million is being amortized on a straight-line basis over 15 years.

35
<PAGE> 36
In connection with the acquisition in 1998, we recorded a non-recurring
charge of $7.0 million in cost of goods sold to write-off the fair value
adjustment to inventory.

CHANGE IN UNITED STATES SALES TERMS

In June 2000, we changed our sales terms in the United States. Prior to
June 2000, we recognized revenue only when title to equipment passed to the
customer, which generally occurred upon payment in full by the customer,
although the risk of loss passed to the customer upon delivery of the equipment.
In June 2000, we changed our sales terms so that title and risk of loss for the
equipment passes to the customer upon delivery, resulting in recognition of
revenue upon delivery to the customer.

The impact of this change in the six months ended June 30, 2000 was an
increase in net sales of $17.4 million, representing sales of equipment under
the new terms for which payment had not been received at June 30, 2000.

CHANGE OF FISCAL YEAR END

Following the Pharmacia Biotech transaction, we changed our fiscal year end
from March 31 to December 31. The results for fiscal 1997 are presented for the
nine month period from April 1, 1997 to December 31, 1997.

INTEGRATION COSTS

Following the Pharmacia Biotech transaction in 1997, we adopted a
restructuring plan to integrate the Pharmacia Biotech and Amersham Life Science
businesses. The principal elements of the plan included:

- consolidating United States manufacturing and research at a single
site in Piscataway, New Jersey, following the divestiture of
manufacturing sites in Milwaukee and Cleveland;

- creating a single global commercial organization with a regional
structure focused on North America, Europe, Japan, Asia Pacific and
Rest of the World; and

- unifying management and administrative functions to support the
business.

The costs of the integration program amounted to $77.6 million. Costs of
$19.8 million, $40.7 million, and $17.1 million were charged in 1999, 1998, and
1997, respectively. These costs related primarily to severance, workforce
relocation, cancellation of a number of distributor agreements, fixed asset
write-downs, professional and consulting fees, and the costs of terminating
certain shared service arrangements with Nycomed Amersham. We expect to complete
the restructuring plan by the end of 2000. However, the plan will have no
further impact on our results of operations.

We incurred $16.5 million of costs to integrate Molecular Dynamics. These
costs comprised severance and other employee related costs as well as the costs
of cancelling distributor contracts. Costs of $6.5 million were charged in 1998
and $10.0 million in 1999.

PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT

In February 2000, we incurred a charge of $3.2 million relating to
purchased in-process research and development in connection with the acquisition
of Praelux, Inc. The in-process research and development charge related to
projects for which technological feasibility had not yet been established at the
acquisition date.

In 1997, we incurred a charge of $18.0 million relating to purchased
in-process research and development in connection with the Pharmacia Biotech
transaction. The in-process research and development charge related to projects
for which the technological feasibility had not yet been established on August
5, 1997.

36
<PAGE> 37
COMPARABLE SALES GROWTH 1999 COMPARED TO 1998

In the discussion and analysis of the year ended December 31, 1999 compared
to the year ended December 31, 1998 we refer to "comparable sales growth" and
growth "on a comparable basis" which is the growth in net sales for the year
ended December 31, 1999 compared to a pro forma for the year ended December 31,
1998 prepared as if we had consolidated the results of Molecular Dynamics as of
January 1, 1998.

IMPACT OF REORGANIZATION ON COMPARABILITY OF RESULTS IN FUTURE PERIODS

The reorganization will significantly impact our results in future periods.
Due to the changes in our capital structure resulting from the reorganization,
including the issuance of the loan note to Nycomed Amersham, we anticipate
higher interest expense than we recorded in prior years. See "Unaudited Pro
Forma Condensed Financial Statements."

QUARTERLY FINANCIAL DATA

Our results for 1999 and 2000 by quarter are presented below.
<TABLE>
<CAPTION>

1999 2000
------------------------------------------------------- -----------------------
FIRST SECOND THIRD FOURTH FIRST SECOND
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net sales .......................... $ 173.0 $ 202.9 $ 199.2 $ 289.0 $ 204.0 $ 245.2
Gross profit ....................... 93.5 114.3 113.0 156.3 113.6 141.5
Operating income (loss) ............ (18.8) 15.9 (2.8) 37.9 (7.1) 19.2
Net income (loss) .................. 12.0 (5.1) 4.0 (17.2) (8.4) 2.8

Earnings per share basic and
diluted ........................... $ 9.50 $ (7.50) $ 1.50 $(19.70) $(10.90) $ 0.30
</TABLE>

Seasonality. As evidenced by the quarterly data above, our business is
subject to seasonal trends. The fourth quarter is heavily affected by the
purchasing patterns of academic customers and government agencies.

Operating income in the second quarter of 1999 was favorably impacted by
$5.5 million of license income related to a litigation settlement.

Net income for the first quarter of 2000 included a $3.2 million
non-recurring charge for in-process research and development in connection with
our acquisition of Praelux in February 2000.

RESULTS OF OPERATIONS

The following table sets forth the percentage of net sales for certain
items in our consolidated statement of operations for the periods presented:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------ -------------------------------------- ------------------------------------
1997 1998 1999 1999 2000
------------------ ----------------- ------------------- ---------------- ------------------
(IN MILLIONS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales ................... $374.2 100.0 $729.4 100.0% $864.1 100.0% $375.9 100.0% $449.2 100.0%
Cost of goods sold .......... 190.7 51.0% (318.8) (43.7)% (387.0) (44.8)% (168.1) 44.7% (194.1) 43.2%
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Gross profit ................ 183.5 49.0% 410.6 56.3% 477.1 55.2% 207.8 55.3% 255.1 56.8%
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Selling, general and
administrative expenses
before integration costs .. (152.6) (40.8)% (281.2) (38.6)% (324.3) (37.5)% (151.4) (40.3)% (186.1) (41.4)%
Integration costs ........... (17.1) (4.6)% (47.2) (6.5)% (29.8) (3.4)% (14.1) (3.8)% -- --
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
</TABLE>

37
<PAGE> 38
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------ -------------------------------------- ------------------------------------
1997 1998 1999 1999 2000
------------------ ----------------- ------------------- ---------------- ------------------
(IN MILLIONS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selling, general and
administrative expenses,
including integration
costs .................... (169.7) (45.4)% (328.4) (45.0)% (354.1) (41.0)% (165.5) (44.0)% (186.1) (41.4)%
Purchased in-process research
and development ........... (18.0) (4.8)% -- -- -- -- -- -- (3.2) (0.7)%
Research and development
expenses .................. (32.8) (8.8)% (67.9) (9.3)% (89.6) (10.4)% (42.3) (11.3)% (56.8) (12.6)%
Other operating income
(expense), net ............ 0.7 0.2% 3.7 0.5% (1.2) (0.1)% (2.9) (0.8)% 3.1 0.7%
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Operating income (loss) ..... (36.3) (9.7)% 18.0 2.5% 32.2 3.7% (2.9) (0.8)% 12.1 2.7%

Interest expense and other .. (2.1) (0.6)% (12.0) (1.6)% (20.9) (2.4)% (10.7) (2.8)% (13.0) (2.9)%
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Income (loss) before income
taxes and minority interest (38.4) (10.3)% 6.0 0.8% 11.3 1.3% (13.6) (3.6)% (0.9) (0.2)%
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Minority interest, net of tax -- -- (0.7) (0.1)% (0.5) (0.1)% (0.2) (0.1)% (0.2) --
Benefit/(provision) for
income taxes .............. 2.3 0.6% (15.8) (2.2)% (17.1) (2.0)% 20.7 5.5% (4.5) (1.0)%
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Net income (loss) ........... $(36.1) (9.6)% $(10.5) (1.4)% $ (6.3) (0.7)% $ 6.9 1.8% $ (5.6) 1.2%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

Net sales. Net sales increased by $73.3 million, or 19%, to $449.2 million
in 2000 compared to $375.9 million in 1999. The impact of the change in United
States sales terms contributed $17.4 million, or 5%, to the increase. This was
offset in part by the discontinuation of our Agency business in the United
States and Europe in 2000 which reduced net sales by $10.2 million, or 3%. The
remaining increase in net sales in 2000 compared to 1999 was due to underlying
growth in the business of $77.9 million, or 20%, and the unfavorable impact of
changes in exchange rates, which decreased net sales by $11.8 million, or 3%.

Net sales of our business segments for the following periods are stated
below:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 2000
---------- -----------
(IN MILLIONS)
<S> <C> <C>
NET SALES
Drug discovery .......... $ 70.4 $ 104.4
Separations ............. 136.3 164.9
Laboratory products ..... 131.4 136.9
Service, agency and other 37.8 43.0
-------- --------
$ 375.9 $ 449.2
======== ========
</TABLE>

38
<PAGE> 39
Drug discovery. Net sales in the Drug discovery segment increased by $34.0
million, or 48%, to $104.4 million in 2000 compared to $70.4 million in 1999.
The principal product driving growth was MegaBACE, which continued the momentum
established in the second half of 1999, with more than double the number of
units sold in the first six months of 2000 compared with the first half of 1999.
In addition, sales of MegaBACE reagents increased by almost fourfold as the
number of MegaBACE units in the installed base increased.

Separations. Net sales in the Separations segment increased by $28.6
million, or 21%, to $164.9 million in 2000 compared to $136.3 million in 1999.
Sales of both Bioprocessing and Laboratory separations increased in 2000.

Bioprocessing net sales increased by $20.8 million, or 25%, to $104.6
million in 2000 compared to $83.8 million in 1999. The increase resulted
principally from higher sales of chromatography media, including a particularly
large order for SOURCE, used in a new procedure for manufacturing inhaled
insulin. This business continues to grow as the number of registered
biopharmaceuticals grows.

Laboratory separations net sales increased by $7.8 million, or 15%, to
$60.3 million in 2000 compared to $52.5 million in 1999. This increase resulted
primarily from sales of AKTAprime, an extension of our AKTA product line, and
increased sales of purification media.

Laboratory products. Net sales of Laboratory products increased by $5.5
million, or 4%, to $136.9 million in 2000 compared to $131.4 million in 1999.
This increase resulted primarily from the benefits of our reorganization of this
segment at the beginning of 2000, which grouped all laboratory products into one
business segment. A significant contribution to the sales increase was the
revitalization of our scanner line with the launch of the Typhoon(TM) scanner.

Service, agency and other. Overall, Service, agency and other net sales
increased by $5.2 million, or 14%. Revenue from service contracts grew by 10%,
or $1.3 million, to $13.8 million in 2000. Royalty income increased by $3.5
million, or 114%. The loss of the discontinued Agency business in Europe and
North America was partially offset by an increase of Agency sales in Japan.

Gross profit. Gross profit increased from $207.8 million in 1999 to $255.1
million in 2000, an increase of $47.3 million, or 23%. Gross profit as a
percentage of net sales, or gross margin, increased to 56.8% in 2000 compared to
55.3% in 1999. The increase in gross margin was caused by several factors,
primarily an increase in sales of higher margin media products in the
Separations segment.

Selling, general and administrative expenses. Selling, general and
administrative expenses, or SG&A, increased by $20.6 million, or 12%, to $186.1
million in 2000 compared to $165.5 million in 1999. Although SG&A increased
compared to the prior period, as a percentage of net sales it decreased to 41.4%
in 2000 compared to 44.0% in 1999.

Included in SG&A in 1999 are expenses of $14.1 million related to
integration costs in connection with the Pharmacia Biotech transaction and the
Molecular Dynamics acquisition. SG&A, exclusive of integration costs, increased
from $151.4 million in 1999 to $186.1 million in 2000. This increase related
primarily to an increase in the amortization of non-cash compensation expense
for performance based stock option plans which was $9.8 million in 2000 and $1.4
million in 1999, and to an increase in selling and marketing costs arising from
continued growth in sales and the launch of new products including the Typhoon
scanner in the Laboratory products business. In addition, the rapid growth in
the number of equipment placements increased installation and service costs
between 1999 and 2000. Included in SG&A are litigation costs and settlements
which increased by $4.9 million in 2000. Excluding the effect of a $5.5 million
litigation settlement which was recognized as income in 1999, litigation costs
decreased by $0.6 million in 2000. SG&A, excluding integration costs, as a
percentage of net sales increased from 40.3% in 1999 to 41.4% in 2000.

39
<PAGE> 40
Research and development expenses. Research and development expenses
increased by $17.7 million, or 42%, to $60.0 million in 2000 compared to $42.3
million in 1999. In 2000, research and development expenses included a write-off
of $3.2 million of in-process research and development charge in connection with
the Praelux acquisition.

Exclusive of the in-process research and development charge, research and
development expenses increased by $14.5 million, or 34%. As a percentage of net
sales, research and development expenses, exclusive of the in-process research
and development charge, increased from 11.3% in 1999 to 12.6% in 2000.

Drug discovery research and development expenses, excluding the in-process
research and development charge, increased by $9.3 million, or 38%, to $33.9
million in 2000 compared to $24.6 million in 1999. This increase was primarily
due to extending our key platforms in gene sequencing, genotyping, high
throughput drug screening and cell analysis, proteomics and high throughput SNP
analysis.

Separations research and development expenses increased by $2.8 million, or
23%, to $15.0 million in 2000 compared to $12.2 million in 1999. The increase
related to several development programs such as biosafety products for virus
clearance and new media for the purification of monoclonal antibodies.

In Laboratory products, research and development expenses increased by $1.4
million, or 25%, to $6.9 million in 2000 compared to $5.5 million in 1999, with
the increase primarily related to the development of the Typhoon scanner.

Operating income
<TABLE>
<CAPTION>

SIX MONTHS ENDED JUNE 30,
-------------------------
1999 2000
--------- ---------
(IN MILLIONS)
<S> <C> <C>
Operating income before integration costs and non-recurring
charges .......................................................... $ 11.2 $ 15.3
Non-recurring charges:
Purchased in-process research and development ..................... -- (3.2)
Integration costs ................................................. (14.1) --
------- -------
Operating income .................................................. $ (2.9) $ 12.1
======= =======
</TABLE>

Operating income increased by $15.0 million, from a loss of $2.9 million in
1999 to income of $12.1 million in 2000. Excluding integration costs reported in
1999, and non-recurring charges reported in 2000, operating income grew by 37%
in 2000. Operating income as a percentage of sales increased from 3.0% before
integration costs in 1999 to 3.4% before non-recurring charges in 2000. This
increase in operating income resulted from growth in certain of the underlying
businesses, as discussed below, as well as a reduction in SG&A as a percentage
of net sales.

Operating income for our business segments for the following periods are
stated below:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 2000
-------- ---------
(IN MILLIONS)
<S> <C> <C>
OPERATING INCOME (LOSS)
Drug discovery .......... $ (38.8) $ (44.8)
Separations ............. 17.6 37.5
Laboratory products ..... 13.9 9.5
Service, agency and
other .................. 4.4 9.9
------- -------
</TABLE>

40
<PAGE> 41
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 2000
-------- ---------
(IN MILLIONS)
<S> <C> <C>
$ (2.9) $ 12.1
======= =======
</TABLE>

Drug discovery. Operating loss in the Drug discovery segment increased by
$6.0 million, or 15%, to $44.8 million in 2000 compared to $38.8 million in
1999. After excluding research and development expenses, including the write-off
of purchased in-process research and development, the segment had an operating
loss of $7.7 million in 2000. In 1999, after excluding research and development
expenses and integration costs, the operating loss was $8.4 million. The
increase in profitability was the result of lower SG&A relative to net sales and
higher net sales in the period.

Separations. Operating income in the Separations segment increased by $19.9
million, or 113%, to $37.5 million in 2000 compared to $17.6 million in 1999.
After excluding research and development expenses, the segment had operating
income of $52.6 million in 2000. In 1999, after excluding research and
development expenses and integration costs, the operating income was $33.9
million. This increase reflected volume growth and an increase in gross margin
from sales of higher margin media products.

Laboratory products. Operating income in the Laboratory products segment
decreased by $4.4 million, or 32%, to $9.5 million in 2000 compared to $13.9
million in 1999. After excluding research and development expenses, the segment
had operating income of $16.4 million in 2000. In 1999, after excluding research
and development expenses and integration costs, the operating income was $23.1
million. In 1999, we had $5.5 million of license income related to a favorable
patent infringement settlement. Excluding this settlement, operating income
before research and development expenses decreased by $1.2 million, primarily as
a result of increased investment in the sales and marketing area and costs
associated with the launch of the Typhoon scanner.

Service, agency and other. Operating income from Service, agency and other
increased by $5.5 million, or 125%, to $9.9 million in 2000 compared to $4.4
million in 1999. Operating income benefitted from the gain on the sale of the
microfluidic technology in this period.

Interest expense and other. Net interest expense and other income increased
from $10.7 million in 1999 to $13.0 million in 2000. The increase of 21% is
attributable to higher net debt resulting from cash outflows between June 30,
1999 and June 30, 2000.

Income taxes. Income tax benefit (provision) decreased from a benefit of
$20.7 million in 1999 to a provision of $4.5 million in 2000. The effective tax
rate was 51% in 2000 and 151% in 1999.

Our effective tax rate was impacted by the high level of fixed charges
which are not deductible for tax purposes, principally goodwill related to the
Pharmacia Biotech transaction and the Molecular Dynamics acquisition. A lower
level of pre-tax income in 1999 relative to these fixed non-deductible charges
resulted in a higher effective tax rate compared to 2000. The benefit for 1999
was based on our full year effective tax rate of 151% and the provision for 2000
was based on an expected full year effective tax rate of 51%.

Net income. As a result of the above factors, net loss in 2000 was $5.6
million compared to a net income of $6.9 million in 1999.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Net sales. Net sales increased by $134.7 million, or 18%, to $864.1 million
in 1999 compared to $729.4 million in 1998. The impact of including Molecular
Dynamics for a full year in 1999 compared to approximately three months in 1998
contributed $59.2 million, or 8%, to the increase. The remaining increase was
due to underlying growth in the businesses of approximately $93.1 million, or
13%, and the unfavorable impact of changes in exchange rates, which decreased
net sales by $17.6 million or 3%.

41
<PAGE> 42
Net sales of our business segments for the following periods are stated
below:
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
-----------------------
1998 1999
---------- ---------
(IN MILLIONS)
<S> <C> <C>
NET SALES
Drug discovery ................ $ 123.7 $ 194.4
Separations ................... 263.8 294.4
Laboratory products ........... 277.2 277.0
Service, agency and other...... 64.7 98.3
-------- --------
$ 729.4 $ 864.1
======== ========
</TABLE>

Drug discovery. Net sales in the Drug discovery segment increased by $70.7
million, or 57%, to $194.4 million in 1999 compared to $123.7 million in 1998.
Of this increase, $39.1 million, or 32%, was due to the inclusion of Molecular
Dynamics for the full year 1999 compared to three months in 1998. Comparable
sales growth including a full year of Molecular Dynamics sales for 1998 was 41%.
This increase was principally due to improved sales of MegaBACE and increased
sales of drug screening systems.

Sales of drug screening systems increased from $62.4 million in 1998 to
$69.5 million in 1999, an increase of 11%. LEADseeker sales, including new
product introductions, accounted for a majority of the increase in sales.

Revenues from the sale of access to or non-exclusive licenses of our
proprietary technology and know-how were included in Drug discovery revenues.
Revenues from these activities amounted to $6.2 million in 1999 and $7.0 million
in 1998.

Separations. Net sales in the Separations segment increased by $30.6
million, or 12%, to $294.4 million in 1999 compared to $263.8 million in 1998.
Net sales of both Bioprocessing and Laboratory separations increased in 1999.

Bioprocessing net sales increased by $24.6 million, or 16%, to $181.6
million in 1999 compared to $157.0 million in 1998. The principal increases were
in sales of chromatography systems, which increased 41% to $18.5 million, and in
chemical media which are used in the production of biologically-based drugs by
11% to $122.8 million. The increase in net sales resulted from approvals of
biologically-based products, or biopharmaceuticals, for sale to end-user
customers. The number of approved biopharmaceuticals increased by 23% to 82 at
the end of 1999. Our Separations products are used in production processes for
almost all of these products.

Laboratory separations net sales increased by $6.0 million, or 6%, to
$112.8 million in 1999 compared to $106.8 million in 1998. This reflected the
continued market acceptance of AKTA protein purifier systems, and substantial
growth of AKTA/FPLC, a liquid chromatography system for protein separation,
following its launch in 1998. Net sales of AKTA/FPLC increased by 76% from $7.1
million to $12.5 million in 1999.

Laboratory products. Net sales of Laboratory products decreased by $0.2
million to $277.0 million in 1999. The impact of including Molecular Dynamics'
scanner products for a full year in 1999 compared to approximately three months
in 1998 increased net sales by approximately $13.2 million. This increase was
more than offset by a decline in the more mature radiochemical products
business, and a decline of $11.0 million, or 45%, from discontinuing certain
reagent products following the sale of the Cleveland facility in 1998. On a
comparable basis, sales would have declined by 7%.

Service, agency and other. Service, agency and other net sales increased by
$33.6 million, or 52%. Revenue from service contracts grew by 28%, from $22.6
million to $29.0 million in 1999. Most of this increase related to service
contracts associated with the increase in the installed base of Drug discovery
equipment. Agency sales increased 65% to $69.3 million, principally due to
certain Agency business in the United States and Europe which

42
<PAGE> 43
increased net sales in 1999 by $21.4 million. This business carried relatively
low gross margin and was discontinued in 2000.

Gross profit. Gross profit increased from $410.6 million in 1998 to $477.1
million in 1999, an increase of $66.5 million, or 16%, slightly less than sales
growth. Gross profit was negatively impacted in 1998 by a $7.0 million write-off
of the fair value adjustment to inventory purchased in the Molecular Dynamics
acquisition. Excluding the inventory fair value adjustment, gross profit in 1998
would have been $417.6 million, and gross margin would have been 57.3%. Gross
margin in 1999 was 55.2% compared to 57.3% in 1998, excluding fair value
adjustments. The overall decrease in gross margin was impacted by several
factors:

- the increase in sales of industrial systems in the Separations
segment, which carried lower overall margins;

- growth in the Agency business in the United States and Europe which
carried relatively low margins. As noted above, this business was
discontinued in 2000; and

- a decline in sales of higher margin radiochemical products in the
Laboratory products segment.

Selling, general and administrative expenses. SG&A increased by $25.7
million, or 8%, to $354.1 million in 1999 compared to $328.4 million in 1998.
Although SG&A increased by 8% compared to the prior year, as a percentage of net
sales it decreased to 41.0% in 1999 compared to 45.0% in 1998.

Included in SG&A in 1998 and 1999 are expenses of $47.2 million and $29.8
million, respectively, related to integration costs in connection with the
Pharmacia Biotech transaction and the Molecular Dynamics acquisition.
See " -- Events Impacting Comparability -- Integration Costs."

SG&A, exclusive of integration costs, increased from $281.2 million in 1998
to $324.3 million, an increase of $43.1 million, or 15%. Approximately $14.2
million of this increase was due to the full year impact of the amortization of
goodwill and intangibles related to the Molecular Dynamics acquisition. The
remainder of the increase reflected the inclusion of a full year of Molecular
Dynamics' SG&A expenses in 1999 compared to approximately three months in 1998,
increased selling and marketing costs in Drug discovery as a result of the
significant growth in that business, principally in MegaBACE sales, and an $8.3
million increase in service and installation costs for equipment due to the
expanding installed base of equipment.

An increase in legal costs of approximately $4.5 million in connection with
preparation for a hearing related to the patent infringement litigation with PE
Corporation was offset by $5.5 million of license income in 1999 related to a
favorable legal settlement unrelated to the PE litigation. See "Business --
Legal Proceedings."

The overall increase in SG&A was partially offset by operating efficiencies
from combining Amersham Life Science and Pharmacia Biotech. These efficiencies
partially contributed to the decline in SG&A, excluding integration costs, as a
percentage of net sales from 38.6% in 1998 to 37.5% in 1999.

Research and development expenses. Research and development expenses
increased by $21.7 million, or 32%, to $89.6 million in 1999 compared to $67.9
million in 1998. Research and development expenses as a percentage of net sales
increased to 10.4% in 1999 compared to 9.3% in 1998.

Drug discovery research and development expenses increased by $10.0
million, or 25%, to $49.6 million in 1999 compared to $39.6 million in 1998.
This increase reflected accelerated development of new products, including the
MegaBACE 384, the next generation DNA sequencer and the SNiPer high throughput
system for SNP analysis, to capture the expanding market opportunities in this
area.

Separations research and development expenses increased by $3.3 million, or
16%, to $23.8 million in 1999 compared to $20.5 million in 1998.

43
<PAGE> 44
In Laboratory products, research and development expenses increased by $2.9
million, or 37%, to $10.7 million in 1999 primarily as a result of the
development of the Typhoon scanner.

Operating income
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1999
--------- --------
(IN MILLIONS)
<S> <C> <C>
Operating income before integration costs and non-recurring charges..... $ 72.2 $ 62.0
Non-recurring charges:
Inventory write-up to fair value ....................................... $ (7.0) --
Integration costs ...................................................... (47.2) (29.8)
------- -------
Operating income ....................................................... $ 18.0 $ 32.2
======= =======
</TABLE>

Operating income increased by $14.2 million, or 79%, to $32.2 million in
1999 compared to $18.0 million in 1998. Operating income as a percentage of net
sales increased from 2.5% to 3.7%. Operating income before integration costs and
non-recurring charges decreased by 14% to $62.0 million, partially due to
increased research and development expenses. The inclusion of a full year of
Molecular Dynamics' intangible amortization in 1999 compared to three months in
1998 increased operating expenses by $14.2 million.

Operating income before integration costs and non-recurring charges as a
percentage of net sales declined to 7.2% in 1999 from 9.9% in 1998. The decline
was a result of lower overall gross margins, increased research and development
expenses as a percentage of net sales, and higher levels of amortization due to
the Molecular Dynamics acquisition.

Operating income for our business segments for the following periods are
stated below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1999
---------- ----------
(IN MILLIONS)
<S> <C> <C>
OPERATING INCOME (LOSS)
Drug discovery .............. $ (53.4) $ (53.3)
Separations ................. 38.8 51.5
Laboratory products ......... 18.0 23.4
Service, agency and other.... 14.6 10.6
------- -------
$ 18.0 $ 32.2
======= =======
</TABLE>

Drug discovery. Operating loss in the Drug discovery segment decreased by
$0.1 million, to $53.3 million in 1999 compared to $53.4 million in 1998.
Excluding research and development costs and integration costs, the segment had
operating income of $8.7 million in 1999 compared to operating income of $0.9
million in 1998. The Drug discovery business had a higher proportion of SG&A to
net sales relative to the other businesses to support the high sales growth of
the segment, particularly MegaBACE.

Separations. Operating income in the Separations segment increased by $12.7
million, or 33%, to $51.5 million in 1999 compared to $38.8 million in 1998.
Excluding research and development expenses and integration costs, the segment
had operating income of $83.8 million in 1999 compared to $75.8 million in 1998,
an increase of 11%, reflecting the increase in net sales. The operating margin
before research and development and integration costs was 28.5% in 1999 and
28.7% in 1998, with the decrease resulting from the growth of certain systems
sales which carried lower margins.

44
<PAGE> 45
Laboratory products. Operating income in the Laboratory products segment
increased by $5.4 million, or 30%, to $23.4 million in 1999 compared to $18.0
million in 1998. Excluding research and development costs and integration costs,
the segment had operating income of $41.7 million in 1999 compared to $40.0
million in 1998. 1999 included $5.5 million of license income related to a
settlement of litigation. Before this settlement, operating income before
research and development and integration costs declined by $3.8 million, as
gross profit was adversely affected by the reduction in sales of higher margin
radiochemical products, which was only partially offset by a reduction in SG&A.

Service, agency and other. Operating income in the Service, agency and
other segment decreased by $4.0 million, or 27%, in 1999 due primarily to a
decrease in bonus receipts received under a distribution agreement that was
discontinued at the end of 1998. In addition, research and development expenses
of $5.5 million related to the development of microfluidic technology were
incurred in 1999. We sold the intellectual property rights for this technology
in January 2000.

Interest expense and other. Net interest expense and other income increased
from $12.0 million in 1998 to $20.9 million in 1999. The increase was primarily
due to an increase in interest expense from $16.5 million in 1998 to $24.1
million in 1999 due to higher debt levels as a result of the acquisition of
Molecular Dynamics, which was financed with borrowings from Nycomed Amersham.
Interest on these borrowings was charged for a full year in 1999 compared to
approximately three months in 1998.

Income taxes. Income tax provision increased to $17.1 million in 1999 from
$15.8 million in 1998. The tax rate is adversely affected by high levels of
fixed charges in both 1999 and 1998 that are not deductible for tax purposes,
principally goodwill related to the Pharmacia Biotech transaction and the
Molecular Dynamics acquisition.

Net Loss. As a result of the above factors, net loss in 1999 was $6.3
million compared to a net loss of $10.5 million in 1998.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 1997

All comparisons of the year ended December 31, 1998 results to the nine
months ended December 31, 1997 results are affected by the Pharmacia Biotech
transaction, the Molecular Dynamics acquisition and the change in our fiscal
year end in 1997, in particular the comparison of a 12 month period to a nine
month period. See " -- Events Affecting Comparability."

Net sales. Net sales for the year ended December 31, 1998 increased by
$355.2 million, or 95%, to $729.4 million from $374.2 million for the nine
months ended December 31, 1997. The reasons for the increase in net sales can be
summarized as follows:
<TABLE>
<CAPTION>
NINE MONTHS ACQUISITION ACQUISITION FIRST INCREASE YEAR
ENDED OF OF QUARTER (DECREASE) ENDED
DECEMBER 31, PHARMACIA MOLECULAR 1998 NET IN BASE DECEMBER 31,
1997 BIOTECH (A) DYNAMICS(B) SALES(C) BUSINESS(D) 1998
------------ ----------- ----------- ------- ---------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NET SALES
Drug discovery ............... $ 63.8 $ 11.4 $ 15.8 $ 21.4 $ 11.3 $ 123.7
Separations .................. 106.8 132.2 -- -- 24.8 263.8
Laboratory products .......... 180.1 60.7 13.6 45.8 (23.0) 277.2
Service, agency and other..... 23.5 16.9 2.2 1.7 20.4 64.7
-------- -------- ------- ------- -------- --------
$ 374.2 $ 221.2 $ 31.6 $ 68.9 $ 33.5 $ 729.4
======== ======== ======= ======= ======== ========
</TABLE>

The significant increase in net sales was due to the following:

45
<PAGE> 46
(A) The inclusion of Pharmacia Biotech in our results for the period from
January 1, 1998 to July 31, 1998 which contributed $221.2 million to the overall
increase in net sales.

(B) The inclusion of Molecular Dynamics for approximately three months in
1998 contributed approximately $31.6 million in net sales.

(C) The change in fiscal year in 1997 resulted in the first calendar
quarter of 1997 not being included in our 1997 results. The inclusion of the
first calendar quarter in 1998 resulted in increased sales of $68.9 million,
excluding the impact of the Pharmacia Biotech business.

(D) After considering the above factors, sales for the "old" Amersham Life
Science business for the period from April 1, 1998 to December 31, 1998 and
sales of Pharmacia Biotech from August 5, 1998 to the end of the year, which we
refer to as the base business, increased from $374.2 million for the comparable
period in 1997 to $407.7 million, an increase of $33.5 million, or 9%.

Drug discovery. Net sales of Drug discovery for 1998 increased by 94%, or
$59.9 million, to $123.7 million from $63.8 million for the nine months ended
December 31, 1997. The increase was largely due to the Pharmacia Biotech
transaction and the Molecular Dynamics acquisition and the change in fiscal year
end noted above. The base business grew by $11.3 million, or 18%. Included in
the increase as a result of the acquisition of Molecular Dynamics are sales of
MegaBACE for approximately three months in 1998.

Separations. Separations net sales increased by $157.0 million, or 147%,
from $106.8 million for the nine months ended December 31, 1997 to $263.8
million in 1998. Of this increase, $132.2 million resulted from the inclusion of
Pharmacia Biotech for a full year in 1998 compared to only five months in 1997.
The remaining increase of $24.8 million resulted primarily from higher sales of
chromatography media.

Laboratory products. Laboratory products net sales for 1998 increased by
$97.1 million, or 54%, to $277.2 million from $180.1 million for the nine months
ended December 31, 1997. This increase is substantially due to the Pharmacia
Biotech transaction, approximately $60.7 million, the Molecular Dynamics
acquisition, approximately $13.6 million, and the longer accounting period in
1998, approximately $45.8 million. The underlying decrease in base business net
sales was approximately $23.0 million, or 13%. This decrease was the result of
lower sales of radiochemicals as well as lower sales of low throughput
sequencing technology, which declined due to a conversion by customers to higher
throughput systems. In addition, there was a decline of $3.9 million from
discontinuing certain reagent products following the sale of the Cleveland
facility in 1998.

Service, agency and other. Service, agency and other net sales increased by
$41.2 million to $64.7 million in 1998 from $23.5 million for the nine months
ended December 31, 1997. The increase related primarily to additional royalty
income of $8.8 million and the inclusion of Pharmacia Biotech for a full year in
1998, which increased net sales by $16.9 million.

Gross profit. Gross profit increased from $183.5 million for the nine
months ended December 31, 1997 to $410.6 million in 1998, an increase of $227.1
million, or 124%. Gross margin increased from 49.0% in the nine months ended
December 31, 1997 to 56.3% for 1998. Gross profit was negatively impacted in
1997 by a $27.4 million write-off of the fair value adjustment to inventory
purchased in the Pharmacia Biotech transaction and in 1998 by a $7.0 million
write-off of the fair value adjustment to inventory purchased in the Molecular
Dynamics acquisition. Excluding these adjustments, gross profit in 1997 and 1998
would have been $210.9 million and $417.6 million, respectively, and gross
margin would have been 56.4% and 57.3%, respectively. On this basis, the
increase in gross margin was principally a result of a shift in our product mix
from Laboratory products to higher margin Separations products, partially offset
by higher Agency sales in 1998, which carried lower gross margins.

Selling, general and administrative expenses. SG&A increased by $158.7
million, or 94%, to $328.4 million in 1998 from $169.7 million in the nine
months ended December 31, 1997. SG&A as a percentage of net sales decreased from
45.4% in 1997 to 45.0% in 1998.

46
<PAGE> 47
Included in SG&A in 1997 and 1998 are expenses of $17.1 million and $47.2
million, respectively, related to integration costs in connection with the
Pharmacia Biotech transaction and the Molecular Dynamics acquisition.
See "-- Events Affecting Comparability."

SG&A, exclusive of integration costs, increased from $152.6 million for the
nine months ended December 31, 1997 to $281.2 million in 1998, an increase of
$128.6 million, or 84%. Approximately $11.0 million of the overall increase was
due to the full-year impact of the amortization of goodwill and intangibles
associated with the Pharmacia Biotech transaction. Approximately $6.1 million of
the increase was due to amortization of goodwill and intangibles related to the
Molecular Dynamics acquisition. The remainder of the increase was attributable
to the full-year impact of the Pharmacia Biotech transaction, the inclusion of
Molecular Dynamics in our results for approximately three months in 1998, and
increased sales and marketing costs to support the growth of the Drug discovery
business after the Molecular Dynamics acquisition.

Research and development expenses. Research and development expenses
increased by $17.1 million, or 34%, to $67.9 million in 1998 compared to $50.8
million in 1997. For the nine months ended December 31, 1997, research and
development expenses included a write-off of $18.0 million of in-process
research and development in connection with the Pharmacia Biotech transaction.

Exclusive of the in-process research and development charge, research and
development expenses increased by $35.1 million, or 107%. As a percentage of net
sales, research and development expenses, exclusive of the in-process research
and development charge, increased to 9.3% in 1998 compared to 8.8% for the nine
months ended December 31, 1997.

Drug discovery research and development expenses, excluding the in-process
research and development charge, increased by $29.7 million to $39.6 million in
1998. This increase included the impact of approximately three months of
research and development activity related to the Molecular Dynamics acquisition
of approximately $5.1 million, the inclusion of a full year of Pharmacia Biotech
research and development activity in 1998, and the inclusion of an additional
three months in the 1998 reporting period. The principal focus of research and
development activity, in addition to MegaBACE and the scanner business of
Molecular Dynamics, was the development of the LEADseeker system, which we
launched in September 1998.

Separations research and development expenses, excluding the in-process
research and development charge, increased by $8.1 million to $20.5 million in
1998, reflecting the inclusion of a full year of Pharmacia Biotech research and
development activity in 1998.

Laboratory products research and development expenses, excluding the
in-process research and development charge, decreased by $2.7 million to $7.8
million in 1998, reflecting lower development activity in low throughput
sequencing technology and radiochemicals.

47
<PAGE> 48
Operating income
<TABLE>
<CAPTION>

NINE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Operating income before integration costs and non-recurring
charges ........................................................ $ 26.2 $ 72.2
Non-recurring charges:
Purchased in-process research and development ..................... (18.0) --
Inventory write-up to fair value .................................. (27.4) (7.0)
Integration costs ................................................. (17.1) (47.2)
------- -------
Operating income (loss) ........................................... $ (36.3) $ 18.0
======= =======
</TABLE>

Operating income increased by $54.3 million to $18.0 million in 1998
compared to an operating loss of $36.3 million in the nine months ended December
31, 1997. Operating income as a percentage of net sales was 2.5% in 1998.
Operating income before integration costs and non-recurring charges increased by
$46.0 million to $72.2 million during this period.

The increase in operating income was due primarily to the Pharmacia Biotech
and Molecular Dynamics transactions, the effect of the change of accounting
period and the growth in the underlying businesses discussed below.

Operating income (loss) for our business segments for the following periods
are stated below:
<TABLE>
<CAPTION>

NINE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
OPERATING INCOME (LOSS)
Drug discovery ............. $ (10.5) $ (53.4)
Separations ................ (11.3) 38.8
Laboratory products ........ (21.7) 18.0
Service, agency and other... 7.2 14.6
$ (36.3) $ 18.0
</TABLE>

Drug discovery. Operating loss in the Drug discovery segment increased by
$42.9 million to $53.4 million in 1998 compared to $10.5 million in the nine
months ended December 31, 1997. Excluding research and development costs and
integration expenses, operating income for the segment was $0.9 million in 1998
compared to $12.0 million in 1997. The primary cause of this decrease was
increased SG&A. The Drug discovery business had a higher proportion of SG&A to
sales relative to the other businesses in order to support the high sales growth
of the segment, principally related to MegaBACE.

Separations. Operating income in the Separations segment increased by $50.1
million to $38.8 million in 1998 compared to an operating loss of $11.3 million
in the nine months ended December 31, 1997. Excluding research and development
expenses and integration costs, the segment had operating income of $75.8
million in 1998 compared to $11.9 million in the nine months ended December 31,
1997. The growth reflected the impact of the longer accounting period and the
Pharmacia Biotech transaction completed in 1997.

Laboratory products. Operating income in the Laboratory products segment
increased by $39.7 million to $18.0 million in 1998 compared to an operating
loss of $21.7 million in the nine months ended December 31, 1997.

48
<PAGE> 49
Excluding research and development expenses and integration costs, the segment
had operating income of $40.0 million in 1998 compared to a loss of $0.2 million
in 1997. The growth reflected the impact of the longer accounting period and the
Pharmacia Biotech transaction completed in 1997.

Service, agency and other. Operating income increased by $7.4 million, or
103%, to $14.6 million in 1998 compared to $7.2 million in the nine months ended
December 31, 1997. Excluding research and development expenses and integration
costs, the segment had operating income of $16.4 million in 1998 compared to
$7.9 million in the nine months ended December 31, 1997. The operating margin
before research and development expenses and integration costs was 25.3% in 1998
and 33.6% in the nine months ended December 31, 1997. This decrease primarily
resulted from increased sales from a number of Agency businesses in the United
States and Europe which carried lower gross margins.

Interest expense and other. Net interest expense and other income increased
from $2.1 million in the nine months ended December 31, 1997 to $12.0 million in
1998. The primary reason for this increase was interest expense, which rose from
$3.7 million in the nine months ended December 31, 1997 to $16.5 million in
1998. This was a result of higher debt levels, principally borrowings from
Nycomed Amersham, and the inclusion of a full year of interest expense on
third-party debt acquired in the Pharmacia Biotech transaction.

Income taxes. Income tax provision increased from a benefit of $2.3 million
in 1997 to a provision of $15.8 million in 1998. The high level of fixed
charges, which were not deductible for tax purposes, increased significantly in
1998 compared to 1997 due to the inclusion of a full year of Pharmacia Biotech
goodwill amortization in 1998 and goodwill related to the Molecular Dynamics
acquisition.

Net loss. As a result of the above factors, net loss in 1998 was $10.5
million compared to a net loss of $36.1 million in the nine months ended
December 31, 1997.

FINANCIAL RESOURCES AND LIQUIDITY

The following discussion of financial resources and liquidity focuses on
our consolidated balance sheet and consolidated statements of cash flows.

SOURCES OF FINANCING AND WORKING CAPITAL.

Prior to the Reorganization. Principal sources of financing prior to the
reorganization consisted of borrowings from Nycomed Amersham and the preferred
shares, owned 55% by Nycomed Amersham and 45% by Pharmacia. Additionally, in
connection with the Pharmacia Biotech transaction, common stock and redeemable
cumulative preferred stock was issued to Pharmacia on August 5, 1997 with a fair
value of approximately $450 million.

At June 30, 2000 total stockholders' equity was $326.3 million, compared to
$335.3 million at December 31, 1999 and $341.0 million at December 31, 1998.
Long-term debt, including the preferred shares, was $142.0 million at June 30,
2000, $145.6 million at December 31, 1999 and $143.0 million at December 31,
1998. The decrease in stockholders' equity at June 30, 2000 was the result of
the dividend charge on the redeemable cumulative preferred stock for the period
and the currency translation adjustment, offset by the retained earnings for the
period. The decrease in long-term debt and preferred shares at June 30, 2000 was
the result of interest accretion on the preferred shares offset by scheduled
repayments of long-term debt and currency translation.

Borrowings from Nycomed Amersham at June 30, 2000 were repayable on demand,
with the exception of $34.7 million which was repayable on 30 days' notice.
Total borrowings from Nycomed Amersham were $416.3 million at June 30, 2000,
$395.9 million at December 31, 1999 and $351.7 million at December 31, 1998. As
these borrowings were repayable on demand, they were classified as current
liabilities on our balance sheet. As a result of this classification, our
working capital was a deficit of $174.9 million at June 30, 2000, $149.0 million
at December 31, 1999 and $162.0 million at December 31, 1998. Our current ratio
was 0.72:1, 0.76:1 and 0.72:1 at June 30, 2000, December 31, 1999 and December
31, 1998 respectively.

49
<PAGE> 50
On September 28, 2000, our principal shareholders entered into a letter of
support with us in which they agreed to make loans or capital contributions, if
alternative sources of financing were unavailable, to enable us to pay our debts
when due if we were otherwise unable to do so.

We believe that the combination of cash flows from our operations and
financing arrangements through Nycomed Amersham will be sufficient to cover our
currently planned operating needs and firm commitments through 2001.

Post-Reorganization. It is our intention to enter into a committed
long-term loan facility subsequent to our completion of this offering to replace
our existing facility with Nycomed Amersham which is currently payable on
demand.

On receipt of the proceeds from this offering, we will use a portion for
general corporate purposes, primarily to fund our operations, a portion to repay
existing intercompany borrowings from Nycomed Amersham, and we will place the
balance on deposit with Nycomed Amersham, for which we will receive a market
rate of interest.

On a pro forma basis, after giving effect to the reorganization and the
offering, total stockholders' equity at June 30, 2000 would have been $ million
and long-term debt would have been $ .

We will also have a long-term loan from Nycomed Amersham of $ million
which will be repayable in 2020.

CASH FLOWS

Cash flows provided by operating activities were an inflow of $25.7 million
in the six months ended June 30, 2000 and an outflow of $14.9 million in the six
months ended June 30, 1999. In the first half of 2000, the increase in cash
flows from operations was principally the result of improved net income compared
with the end of 1999, combined with a reduction in trade receivable balances at
the end of the period. Cash flows from operations included payments related to
integration costs of $6.6 million in the six months ended June 30, 2000 and
$16.9 million in the six months ended June 30, 1999.

Cash flows from operating activities were $14.3 million in 1999, $32.2
million in 1998 and $28.1 million for the nine months ended December 31, 1997.
During 1999, operating cash flows were affected by an increase in trade
receivables and a build-up of inventory levels, offset by a reduction in net
losses compared to 1998. Equipment inventory, particularly of Drug discovery
products, accumulated at the end of 1999, in anticipation of higher demand in
the first half of 2000. In 1998, an increase in trade receivables reduced cash
by $55.1 million, although this was largely offset by a reduction in net losses
compared to 1997. In the nine month period ended December 1997, the operating
cash inflow benefitted from a reduction in inventory levels and an increase in
other assets and liabilities. Cash flows from operations included payments
related to integration costs of $33.8 million in 1999, $58.2 million in 1998 and
$8.0 million in the nine months to December 1997.

Cash flows used in investing activities were $33.7 million in the six
months ended June 30, 2000 and $30.6 million in the six months ended June 30,
1999. The increase in funding required was due to the acquisition of businesses,
primarily the acquisition of Praelux for $8.5 million. Expenditures for
property, plant, and equipment were $25.7 million in the six months ended June
30, 2000, compared to $30.9 million in the first half of 1999.

Net cash used for investing activities was $67.7 million in 1999, $232.1
million in 1998 and $14.1 million in the nine months ended December 31, 1997. In
1999, the outflow related to capital expenditures on the expansion of the
Piscataway, New Jersey facility into an integrated manufacturing and research
and development facility and continuing improvement of our information
technology systems. In 1998, the majority of the outflow related to the $184.3
million paid for the Molecular Dynamics acquisition and in 1997 related solely
to capital expenditures on property, plant and equipment.

50
<PAGE> 51
Cash flows provided by financing activities were $6.3 million in the six
months ended June 30, 2000 and $36.3 million in the six months ended June 30,
1999. The principal financing activity in 1999 and 2000 consisted of additional
borrowings from Nycomed Amersham. This was offset by a payment in 2000 of $17.4
million to finance the acquisition of Nycomed Amersham shares subject to options
granted to our employees.

Financing activities provided a cash inflow of $48.6 million in 1999,
$211.8 million in 1998 and $15.5 million for the nine months ended December 31,
1997. The principal inflow during each period related to additional borrowings
from Nycomed Amersham under committed intragroup loan facilities. In 1998, these
borrowings amounted to $212.1 million, the majority of which was used to finance
the acquisition of Molecular Dynamics. In 1997, the financing was used to fund a
dividend of $20.2 million related to the return of earnings to Nycomed Amersham.

In March 2000, we entered into a supply agreement with Analytica of
Branford which requires us to make future payments depending on milestones
achieved by Analytica of Branford. In addition, we at our option may acquire a
controlling interest in Analytica of Branford.

In April 2000, we entered into a license agreement with V.I. Technologies,
Inc. which requires us to make future payments of up to $1.5 million. In
addition, we may, at our option, advance additional funds to V.I. Technologies
upon V.I. Technologies' request.

At June 30, 2000, we had $27.5 million in cash and cash equivalents and
$246.7 million of availability under our revolving credit agreements with
Nycomed Amersham. This debt is at variable interest rates ranging from 0.3% to
6.9% at June 30, 2000. At December 31, 1999, we had $30.9 million in cash and
cash equivalents and $306.6 million of availability under our revolving credit
agreements with Nycomed Amersham. This debt is at variable interest rates
ranging from 0.8% to 8.5% at December 31, 1999. We currently do not enter into
interest rate agreements to fix the interest rates on this debt, but we may
consider entering into such agreements in the future to minimize the impact of
future changes in interest rates.

MARKET RISK AND RISK MANAGEMENT POLICIES

Our earnings and cash flows are subject to fluctuations due to changes in
foreign currency exchange rates and interest rates. Our risk management
practices include the selective use, on a limited basis, of forward foreign
currency exchange contracts and interest rate agreements. These instruments are
used for purposes other than trading.

Foreign currency exchange rate movements create fluctuations in United
States dollar reported amounts of foreign subsidiaries whose local currencies
are their respective functional currencies. We have not used foreign currency
derivative instruments to manage translation fluctuations. We primarily use
forward foreign currency contracts to manage exposure on estimated future cash
flows denominated in currencies other than the subsidiaries functional currency.
These cash flows are normally represented by actual and anticipated receivables
and payables.

At December 31, 1999, we had forward foreign currency contracts with
Nycomed Amersham with an aggregate notional amount of $62.2 million. No foreign
currency contracts were outstanding with counterparties other than Nycomed
Amersham. The fair market value of these contracts is recorded on our balance
sheet, as the contracts do not qualify for hedge accounting. These contracts
expire through May 31, 2001. The cash flows expected from the contracts will
generally offset the cash flows of related non-functional currency transactions.
The change in value of the foreign currency forward contracts resulting from a
10% movement in foreign currency exchange rates would have been approximately
$2.3 million at December 31, 1999.

At December 31, 1999, we had no interest rate agreements outstanding.

51
<PAGE> 52
RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 is
effective for APBiotech for all fiscal quarters and fiscal years beginning after
January 1, 2001. SFAS 133 requires that all derivative instruments be recorded
on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. SFAS 133 is not
expected to have a material impact on our consolidated results of operations,
balance sheet or cash flows.

52
<PAGE> 53
BUSINESS

OVERVIEW

We are a leading global provider of biotechnology systems, products and
services for research into genes and proteins, for the discovery and development
of drugs, and for the manufacture of drugs based on biological molecules, also
known as biopharmaceuticals. We offer a comprehensive product range that spans
the entire drug discovery and development process, positioning us to capitalize
on the new gene economy. We have a proven track record of providing high quality
technology to our customers, who number approximately 50,000 in over 120
countries. We have a strong, global customer franchise, with pharmaceutical,
biotechnology and agrochemical companies, research institutes, universities and
medical research centers. Our customers include all of the top 20 pharmaceutical
companies. We have a strong track record in innovation and research and
development, spending a substantial amount on these activities. Our
long-standing commitment to research and development has enabled us to develop a
broad range of innovative technologies and products, including products for gene
analysis, protein analysis, drug screening, toxicology studies, clinical drug
development and drug manufacturing.

The following chart illustrates the breadth of our technology platforms.

DRUG DISCOVERY AND DEVELOPMENT PROCESS

[FLOW CHART]

53
<PAGE> 54
Our business includes three principal segments that share activities in
research and development, sales and marketing, distribution, manufacturing and
service. Our business segments are described in the table below.
<TABLE>
<CAPTION>

ESTIMATED
MARKET MARKET MARKET
BUSINESS SEGMENT TYPES OF PRODUCTS SIZE(1) SHARE(1) POSITION(1)
----------------------- ---------------------------------------------- ------- -------- -----------
<S> <C> <C> <C> <C>
Drug discovery High throughput systems to improve the $1.5bn 15% 2
effectiveness of pharmaceutical research and
development and the speed to market for drugs,
including:
- genetic analysis and sequencing
- protein analysis and characterization
- drug screening
- metabolism and toxicology studies
- single nucleotide polymorphism, or SNP
analysis

Separations
- Bioprocessing Chromatographic systems for the purification $350m 55% 1
and production of biopharmaceuticals, such as
insulin and vaccines, on a large scale

- Laboratory Laboratory scale systems for the purification $400m 30% 1
separations and separation of proteins

Laboratory products Tools and technical knowledge for the $2.0bn 15% 1
purification, detection and analysis of
biological molecules by life science
researchers
</TABLE>

---------------

Source: Company estimates.

(1) As of December 31, 1999.

Our business segments serve overlapping customer bases, which allows us to
enhance our operating efficiency through cross-selling and reduced
administrative costs. We are also able to maximize our return on investment in
the research and development of drug discovery and separation systems as the
resulting technologies often evolve, through life cycle management, into
standard laboratory research products.

BUSINESS ENVIRONMENT

The announcement of the completion of the draft sequence of the human
genome in June 2000 marked a major scientific milestone, which has far reaching
implications for the development of new medicines and diagnostics based upon
genetic information. The unfolding "gene economy" has already given rise to a
number of different business initiatives devised to accelerate the development
of robust, advanced technologies, which can convert genomic information into
specific and useful end products such as new diagnostics and drugs. We have
already made fundamental contributions to the development of the technologies
which were vital to the mapping of the human genome. For example, we introduced
the capillary electrophoresis technology, which made high throughput sequencing
a scientific possibility, and also developed highly specialized dyes and enzymes
used to map the human genome.

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<PAGE> 55
As the genomic revolution progresses, new initiatives in the field of
proteomics will allow scientists to better understand the function of genes and
the proteins for which they code. This understanding will be of fundamental
importance in the development of molecular medicine and holds out particular
promise in the ability to correlate genetic differences with respect to disease
states and individual responses to different drugs. The long-term goal of these
efforts is to create personalized medicine, where medicines will be manufactured
cost-effectively and tailored to an individual's genotype, or DNA blueprint.

The efforts to create personalized medicine will be furthered by the
application of many new technologies, instruments and bioinformatics tools which
can be used to organize and direct the vast amount of genetic information that
is now being created. The effort to fully harness this information and turn it
to productive uses will require the creation of highly sophisticated,
computer-based systems that can be used by scientists to build on knowledge
gained through a multitude of different scientific and business initiatives. The
development of these systems, and the ability to integrate and interpret
information drawn from across the spectrum of genomics, proteomics and drug
screening, will be of fundamental importance in making large-scale advances in
drug discovery and development.

We are also now seeing the rapid growth generated by a previous revolution
in medicine - the introduction of biopharmaceuticals in the late 1970s which was
marked particularly by the launch of the first genetically engineered drug in
1982. Since then, over 80 of these life-saving medicines have been approved or
launched and there are now over 360 more such drugs in clinical trial. These
potential drugs represent a rapidly growing market for the manufacturing
technologies in our Bioprocessing business.

OUR BUSINESS STRATEGY AND COMPETITIVE STRENGTHS

We believe that we are well positioned with both our commercial and
academic customers as a result of a diverse set of competitive strengths which
include:

- The breadth of our technology platforms and our comprehensive product
lines which span the entire drug discovery and development process. We
offer by well-recognized branded products such as MegaBACE, LEADseeker
and Sepharose.

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<PAGE> 56
- An integrated portfolio. Our Laboratory products business provides an
important route to market for products from our Drug discovery
business once these products become widely accepted by the general
research community, thus enabling effective life cycle management. We
have also created a strong link between our Laboratory separations
products and our Bioprocessing business where we enable customers to
scale up processes for the purification of biopharmaceuticals which
have been developed in the laboratory.

- Strong management team. We have a strong management team with an
average of over 15 years of experience in the life sciences industry.

Specific plans for each principal business segment are as follows:

- Drug discovery. We plan to capitalize on the continuing growth in the
drug discovery market by creating innovative technologies to develop
systems to enable genomics, proteomics and drug screening. We have
demonstrated this by launching leading, innovative systems in each of
these areas and will continue their development with extensions into
second or third generation systems supported by bioinformatics.

- Separations. We are positioning ourselves to capitalize on the growth
in biopharmaceutical products and to grow this business through the
introduction of new products and technologies. Furthermore, we expect
that as the relationship between gene products and diseases is
clarified, this pipeline will increase.

- Laboratory products. Our aim is to achieve above market growth by
managing the product life cycle from our Drug discovery business and
by focusing on growing applications in the research community.

- Service, agency and other. We plan to capitalize on the growing demand
for services that sophisticated systems require when working in
production environments.

We also expect to develop new opportunities as they arise in order to
capitalize on the rapidly accelerating demand for products in the new gene
economy.

DRUG DISCOVERY

We have a leading position in the market for systems that enable faster,
more efficient drug discovery, with approximately 15% market share. This
business segment covers the following areas: genomics, proteomics, drug
screening, metabolism/toxicology analysis, pharmacogenomics, and bioinformatics.

GENOMICS

Genomics is the study of the structure and function of the genetic material
of living organisms. The human body is composed of billions of cells, each
containing deoxyribonucleic acid, or DNA, which encodes the basic instructions
for cellular function. The complete set of an individual's DNA is called the
genome, and is organized into 23 pairs of chromosomes, which are further divided
into approximately 100,000 smaller regions called genes. Each cell uses, or
expresses, only those genes required for its specific functions. Each gene is
comprised of a string of four types of nucleotide bases, known as A, C, G and T.
Human DNA has approximately 3 billion nucleotides and their precise order is
known as the DNA sequence. When a gene is expressed, a copy of its DNA sequence,
called messenger RNA, or mRNA, is used to direct the synthesis of a protein.
Proteins direct cell function and ultimately the development of individual
traits. A variation in any part of a gene, called a polymorphism, may result in
a change in cell function leading to disease. In molecular medicine, drug
development is based on understanding this core process by which DNA ultimately
translates into a protein, and the function of proteins.

Researchers using genomics techniques are generally investigating the
change in gene activity and variation in disease through the sequencing of
genes, the discovery of new genes and gene variants, and the identification of
those genes which are responsible for certain physical or biochemical behaviors
in living cells. They seek to

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<PAGE> 57
understand how and when the activity of these genes is switched on or off in
normal development and to investigate which gene variants occur most frequently.
Therefore, researchers need tools to help them produce, label and analyze DNA
fragments, to study the various steps of gene expression and to identify and
measure the levels of various proteins produced.

Interpreting the DNA sequence can lead to the identification of the
proteins derived from it. In addition, comparison of DNA sequences between
normal and affected individuals across a disease population can provide valuable
information on the genetic changes giving rise to the disease, thereby
facilitating the development of improved diagnostic and therapeutic techniques
and the development of drugs targeted toward an individual's specific genotype.

Scientists are using automated systems to speed up the sequencing process.
Our introduction and application of capillary electrophoresis to enable high
throughput gene sequencing marked a significant change in the efficiency of the
process and significantly advanced the decoding of the human genome.

We provide a comprehensive range of instruments, reagents and software sold
individually or, increasingly, as integrated systems to enable full genetic
analysis. Certain of our products, in particular our MegaBACE high throughput
sequencing systems, which use capillary electrophoresis, have been critical to
the sequencing of the human genome, and together with our microarray systems
will be crucial for comparative gene expression analysis that will occupy
scientists for many years to come.

Our principal genomics products are summarized below.

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
------------------------------ -------------------------------------- -----------------------------
PRODUCTS BEING MARKETED
------------------------------ -------------------------------------- -----------------------------
<S> <C> <C>
MegaBACE 1000(TM) High throughput sequencing system Automated DNA sequencing
DNA Sequencer using capillary electrophoresis in 96
capillaries

MegaBACE 1000(TM) Genotyper High throughput genotyping system Automated
using capillary electrophoresis microsatellite-based
genotyping

Generation III Microarray DNA microarray spotter and scanner Differential gene expression
System

4000A Microarray Scanner DNA microarray scanner sold together Differential gene expression
System with our reagents

Thermo Sequenase(TM) DNA polymerase which is stable at high Automated DNA sequencing
temperatures for use in sequencing
reactions

DYEnamic(TM) Energy Transfer Fluorescently labeled primers and Automated DNA sequencing
primers and terminators terminators for DNA sequencing giving
highly sensitive detection

PRODUCTS IN DEVELOPMENT

MegaBACE(TM) 4000 384 capillary DNA sequencer Automated DNA sequencing
with very high throughput

MegaBACE(TM) 500 Flexible throughput capillary array Automated DNA sequencing
sequencing system

Chip Sequencer Next generation microchip sequencing Medium to ultra high
and genotyping technology with throughput DNA sequencing
untended operation and genotyping
</TABLE>

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<PAGE> 58
<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
------------------------------ -------------------------------------- -----------------------------
PRODUCTS BEING MARKETED
------------------------------ -------------------------------------- -----------------------------
<S> <C> <C>
DNA template amplification Template preparation using Rolling Preparation of template for
reagents Circle Amplification or RCA DNA sequencing

NanoPrep(TM) Miniaturized and automated sample Preparation for high
preparation throughput DNA sequencing
and genotyping

Direct Load DNA sequencing reagents Direct load of sequencing
reactions unto
instrumentation,
eliminating the clean-up
step

AutoSeq(TM) Sequencing sample clean-up DNA sample preparation for
high throughput sequencing

Equalizer(TM) Template preparation system High throughput template
preparation

SNuPe reagents High throughput, single nucleotide Genotyping, SNP validation
primer extensions for MegaBACE and scoring

Microarray system Pre-arrayed slides, automated slide Gene expression profiling
processor and scanner, Generation IV using microarrays
spotter
</TABLE>

The MegaBACE 1000 DNA sequencer is an automated, fluorescent DNA sequencing
system that consists of hardware, software and reagents designed for
industrial-scale DNA analysis. It uses 96 capillaries, each about the size of a
human hair, filled with a gel which acts as a separating filter during
electrophoresis, the separation of particles using an electric field. Operating
in parallel, the capillaries separate, detect and analyze fluorescently-labeled
DNA fragments. The MegaBACE system provides more genetic data than competing
products, with sequenced lengths typically exceeding 550,000 base pairs per day,
compared to 450,000 base pairs per day for the best of the competing products.
The system automates gel preparation, sample injection, DNA separation and data
analysis, allowing very significant productivity gains compared to traditional
slab gel systems. MegaBACE also provides customers with enhanced processing
speed. The processing time for each DNA sample is approximately two hours,
compared to three hours for competing products. We believe that MegaBACE is
preferred by end users who require accuracy and reliability in DNA sequencing.
MegaBACE has played a significant role in several public and private sector
genome sequencing operations, and had a total installed base of over 500 systems
worldwide as of June 30, 2000. The MegaBACE systems generate recurring revenues
through sales of reagents and other consumables that are used with the system.

We are also extending our MegaBACE brand to the wider sequencing market,
introducing a flexible concept which will enable users to move between 16, 32,
48 and 96 capillaries on the MegaBACE platform.

In addition to DNA sequencing, the MegaBACE platform can support a range of
drug discovery applications, including microsatellite genotyping, or identifying
the genes possessed by individuals, and the study of inheritance patterns and
SNP variations in single base pairs of DNA. In 1999, we launched a second
application on the MegaBACE 1000 platform to allow researchers to detect small
differences in similar DNA samples. This application, known as the MegaBACE 1000
Genotyper, uses the same hardware as the MegaBACE sequencing system but employs
different software and chemistries optimized for sizing DNA fragments and
comparing them to known standards.

We are developing the next generation of MegaBACE systems which will use
384 capillaries instead of 96. We expect that this new system will be able to
process four times the number of samples as the existing systems and routinely
produce sequencing lengths up to double those of the current system. We estimate
that these new systems will be tested by customers by the end of 2000.

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<PAGE> 59
We are also developing a new technology based on glass chips, where we will
provide customers with thin glass chips with built-in channels used as an
alternative to capillaries in which to separate and sequence DNA fragments. This
technology is likely to sequence DNA samples in half the time required by the
MegaBACE system, thereby allowing customers to sequence even more efficiently.
We expect to launch this technology as a commercial product by the end of 2002.

Microarrays are small arrays of biological material on an inert substance
that can be used to test for functional criteria. They are powerful tools for
scientists to monitor and analyze the expression levels of thousands of genes in
a single experiment. Our microarray systems use our dyes and scanners and large
sets of cloned DNA which we spot unto on a glass surface, or genes on a glass
chip, to enable researchers to study how genes are expressed. In 1996, we
created an early access program to fund development of microarray products and
technologies called the Microarray Technology Access Program, or MTAP.
SmithKline Beecham Corp. became the first pharmaceutical company to join the
MTAP, and since then the program has expanded rapidly, now including more than
30 pharmaceutical, genomics, biotechnology, and academic organizations using the
microarray systems primarily for gene expression research. In exchange for
paying us an upfront membership fee, customers who are members of the MTAP
receive non-exclusive licensing rights to microarray products and technologies,
technical support for these products and discounts on the product prices. We
have supplemented the MTAP with programs designed for the broader research
market. These programs are designed to supply non-MTAP customers with integrated
microarray systems along with training and ongoing technical support. In
addition to membership fees, the MTAP and its related programs provide us with
continuing revenue streams from product sales.

Over the course of 2000, we will offer an increasing range of microarray
products, such as microarray chip scanners, including the recently launched
4000A Microarray Scanner System, and prearrayed slides containing libraries of
DNA molecules optimized for gene expression studies. Prearrayed slides provide
gene content to customers who prefer not to produce slides in their own
laboratories.

PROTEOMICS

Proteomics is the study of protein content, structure and function in cells
and will lead to better understanding of essential biological processes in cells
and aid the development of new drugs. While proteomics currently represents only
15% of our Drug discovery sales, we believe that the proteomics market has the
potential to become at least as large as the genomics market. Proteins are
formed by the many possible combinations of the 20 amino acids which are the
protein building blocks for which a gene codes. The draft completion of the
human genome marks the beginning of the rapid expansion of proteomics. The genes
provide the code for proteins, but the proteins are critical in controlling all
cellular function, either as enzymes, messengers or structural cell elements.

Interest in proteomics research is growing rapidly as pharmaceutical and
biotechnology companies seek to understand the role of proteins in diseases, and
generate new ideas for drugs or interventions in cellular processes. The
complexity of this task and its potential in the drug discovery and development
process create for us a new opportunity for high throughput systems for protein
analysis, involving the next generation of two dimensional gel electrophoresis,
mass spectrometry and liquid chromatography technology. Two dimensional gel
electrophoresis is a technique for the separation of proteins by electrical
charge in the first dimension and by size in the second dimension. Mass
spectrometry is a technique for identifying chemicals, including proteins, by
their molecular weight. Liquid chromatography is the separation of proteins and
peptides according to their physical properties. We currently market products
using differential gel electrophoresis and are developing products using mass
spectrometry and liquid chromatography techniques.

Under the brand name Ettan we have built on our significant experience in
protein analysis, separation and purification to develop high throughput
analysis systems for proteomic research, and we believe we are well positioned
to take advantage of this market opportunity. Over the next few years, we expect
to launch a series of integrated protein analysis systems, also under the Ettan
brand, based on linking two dimensional gel electrophoresis, imaging
instruments, mass spectrometry and liquid chromatography. Our first mass
spectrometry product, the Ettan MALDI-TOF, will be launched by the end of this
year.

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<PAGE> 60
Our principal proteomics products are summarized below.
<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
------------------------------ -------------------------------- -----------------------------
PRODUCTS BEING MARKETED
------------------------------ -------------------------------- -----------------------------
<S> <C> <C>
Two Dimensional Differential Flourescent dyes for labeling Protein expression analysis,
Imaging Gel Electrophoresis proteins, imaging instruments which is the process of detecting
system or 2D DIGE and software differences in protein
populations found in normal and
diseased cells

ImageMaster(TM) Imaging analysis software Protein expression analysis

Smart(TM) System Small scale liquid Protein identification and
chromatography system characterization which is the
process for determining the
structure and function of a
protein

GST recombinant fusion products Vectors and reagents to Protein identification and
facilitate the production of characterization
recombinant proteins

PRODUCTS IN DEVELOPMENT

Ettan(TM) Spot Picker Accurate automatic spot picking Protein expression analysis and
identification

Spot Handling Platform Integrated spot picker, Protein expression analysis and
digester and spotter identification

Ettan(TM) MALDI-TOF Mass spectrometry Protein identification and
characterization

Ettan(TM) LC-MS Liquid chromatography-mass Protein identification and
spectrometry integrated system characterization

P4 - Parallel Purification High throughput protein Protein amplification and
Protein Platform purification platform purification
</TABLE>

DRUG SCREENING AND METABOLISM/TOXICOLOGY ANALYSIS

Many new drug targets are being discovered as a result of genomic and
proteomic research efforts. These discoveries, coupled with the greater
availability of large libraries of possible drug compounds, have resulted in
demand from the pharmaceutical industry for higher throughput technology for
drug screening. This is becoming the major bottleneck in the drug discovery
process. In order to prevent pharmaceutical companies from engaging in expensive
animal testing and clinical trials, more sophisticated technology is needed to
enable them to understand the metabolism and toxicology of drug candidates
earlier in the process in order to eliminate drug candidates with high toxicity.

Once a target has been identified, many candidate chemicals are tested
rapidly in a process termed high throughput screening in order to identify lead
candidates which interact with the target. These lead candidates are then
investigated intensively with respect to both its biochemical and chemical
properties in order to optimize the lead candidate, through secondary drug
screening, to a stage where it may perform adequately as a novel medicine for
the treatment of disease. Typically, between 100,000 and two million candidates
will be screened to identify the handful that may constitute lead candidates.
These studies require the sensitive analysis of complex reactions involving a
number of biochemicals, proteins and nucleic acids. The assays used require
advanced technology for both labeling and detection of biomolecules and the
assays must be able to be performed quickly.

We established an early market leadership position in high throughput
screening through the introduction of our Scintillation Proximity Assay in the
early 1990s, sold through technology access contracts. Building on this success,
we introduced the innovative LEADseeker system in 1998. During 1999, we launched
the next generation LEADseeker. This system is a fully automated, format free,
multi-modality system which offers the choice of fluorescent, chemiluminescent
and radioactive chemistries. It incorporates advanced, charge-coupled device
detection technology and can support the screening of 750,000 compounds a day.
The flexibility of our

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LEADseeker system is very important to our customers because it allows them to
select the chemistry format that will produce the highest quality research
results for their particular needs.

Our acquisition of Praelux in February 2000 has provided us with access to
advanced cell imaging technology to complement the LEADseeker high throughput
screening platform through the development of systems for cell-based secondary
assays for drug screening. The LEADseeker cell analysis system will enable real
time tracking and measurement of the movement of molecules within a cell. This
significant advance over existing technology uniquely combines high throughput
and high information content. In addition to the LEADseeker systems, we also
provide customized assays for specific customers.

We are also a major provider of services for the custom radioactive
labeling of potential drug compounds for absorption, distribution, metabolism
and excretion studies.

Our principal drug screening products are summarized below:
<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
------------------------------ -------------------------------------- ------------------------
PRODUCTS BEING MARKETED
------------------------------ -------------------------------------- ------------------------
<S> <C> <C>
Scintillation Proximity Beads which emit light when a radioactive High throughput
Assay or SPA compound is bound close to the particle screening
surface

LEADseeker(TM) imaging system High throughput systems for automated High throughput
multi-modality analysis of screening screening
assays

Cyanine Dye labels Fluorescent dyes optimized for labeling Assay technology for
of proteins and nucleic acids screening and
development assays

Custom labeling Custom synthesis of molecules with radio Toxicology, metabolism
or stable isotope labels and distribution studies

PRODUCT IN DEVELOPMENT

LEADseeker(TM) cellular analysis Advanced imaging device and biological Cell-based system for
system assay reagents secondary screening in
drug discovery process
</TABLE>

PHARMACOGENOMICS

Pharmacogenomics is the study of the impact of genetic variation on the
efficacy, uptake, distribution, and toxicity of a drug, known together as drug
response.

DNA sequences contain a variety of known polymorphisms, which are the
existence of a gene in a population in at least two different forms, not
attributable to mutation alone. Polymorphisms of a single nucleotide base, or
SNPs, can have significant effects on both susceptibility to disease as well as
drug response. As a result, the biotechnology and pharmaceutical industries have
recently focused attention on the discovery of SNPs. Because they occur
frequently and are stable, SNPs can act as signposts within the genome. By
comparing the analysis of SNPs in DNA samples taken from diseased and healthy
individuals, researchers will be able to indicate where genes associated with
the disease are located and which SNPs are important in the process of
regulating physiology.

With the completion of the draft of the human genome, the number of
identified SNPs will increase dramatically. Scientists and researchers will
conduct SNP association studies to find the potential relevance of identified
SNPs to human health. As a result, we expect the demand for SNP scoring to
increase significantly over the next few years. SNP scoring refers to the
measurement of the presence or absence of a particular SNP in the genetic
sequence of a particular individual. To find the subset of SNPs that occurs with
the greatest frequency in human diseases or that are potentially responsible for
variations in drug response, hundreds of millions of SNP scores must be made and
correlated with health and other features of interest. Research and clinical
laboratories will require highly accurate, high throughput SNP scoring
technology that can be implemented at an affordable cost to find these valuable
SNPs.

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<PAGE> 62
To address the field of pharmacogenomics and enable the development of
personalized medicine, we are developing SNiPer, a high throughput system for
the analysis and scoring of up to 500,000 SNPs per day. This innovative
technology will be launched by the end of this year and will use rolling circle
amplification, a new technique for signal amplification for DNA, developed at
Yale University and licensed exclusively to us from Molecular Staging Inc. We
expect SNiPer to enable pharmaceutical companies to carry out rapid, low cost
analysis of these SNPs by reducing the cost of SNP analysis from the current $1
per SNP to less than ten cents per SNP at high volume. This technology will
represent a significant advance in the tools available to study genetic
variation and, in the future, will allow for the measurement of several SNPs
simultaneously.

We expect that MegaBACE will also play an important role in this field by
allowing researchers to discover and validate SNPs through high throughput
genotyping.

In March 2000, we joined the SNP Consortium, a $50 million non-profit
enterprise funded by the Wellcome Trust and 10 major pharmaceutical companies.
Its mission is the construction of a high density SNP map that will be made
publicly available by bringing together the key DNA sequencing centers,
including the federal Human Genome Project, the Sanger Center, Washington
University, Stanford University and Cold Spring Harbor, with major
pharmaceutical companies in a two-year venture. This will reduce the time, risk
and cost required to produce the SNP map and will therefore enable efforts to be
focused on the application of the data. Our membership in the SNP Consortium is
expected to facilitate our being an innovator in SNP discovery.

Our principal pharmacogenomics product in development is summarized below.
<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
----------------------------- -------------------------------------- ----------------------------
<S> <C> <C>
SNiPer(TM) Rolling circle amplification reagents, High throughput system for
automation and detection system and detecting and analyzing
laboratory workflow systems SNPs
</TABLE>

SPIN SIGNAL TECHNOLOGY

Among the bottlenecks in the drug discovery process are the relatively slow
detection speed and lack of sensitivity with which drugs or proteins are
analyzed.

Using technology developed in Nycomed Amersham's Imaging business, we are
pioneering a completely novel approach to analyzing molecules, called spin
signal technology. This technology will enable very rapid and ultra-sensitive
structural and functional analysis of molecules, without the use of conventional
radioactive or fluorescent tags or labels, and offers the potential to
significantly accelerate the speed of the drug discovery process.

Spin signal technology has a wide range of applications, including drug
lead optimization, metabolism studies and functional proteomics, and will enable
a reduction in the use of radiochemical labeling and animal testing. Proof of
concept has already been demonstrated and the technology is supported by a
strong intellectual property portfolio. We expect the first spin signal
technology products to be available in 2002.

BIOINFORMATICS

Bioinformatics enables researchers to capture and transform massive amounts
of data from different systems into organized databases that can be analyzed. As
high throughput tools for drug discovery become established, we expect that the
major bottleneck will no longer be hardware, but the ability of the customer to
manage raw data generated from its laboratories and to transform that data into
an organized body of information that can facilitate the drug discovery process.
The market environment is now set to change as customers adopt bioinformatics
products to capitalize on the ability of these high end systems to generate
data. Customers are also recognizing the power of integrating their data across
disciplines, other institutions and steps in the drug discovery process, which
has created a market for analytical software packages and expert knowledge
systems.

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We are introducing bioinformatics in order to support our integrated
systems and customers' laboratory workflow systems. These systems are designed
to:

- design, automate and acquire data, such as gene sequences, from
biological experiments;

- analyze and interpret experiment results; and

- enable the transfer of refined data into drug discovery databases.

We expect these systems will further the goal of enabling molecular
medicine by speeding up the drug discovery process through more efficient data
handling.

We are collaborating with Cimarron Software Services, Inc., in which we
have a 19% equity investment, to develop a number of laboratory workflow
software packages that we expect to commercialize. Although these packages will
be integrated across our drug discovery technology platforms, including
MegaBACE, microarray systems, Ettan and SNiPer, they will be based on open
architecture, which means that these packages could be connected to other
software packages. We expect to launch our first bioinformatics products in
2001.

SEPARATIONS

Our separations business is built on our extensive experience in liquid
chromatography and on our understanding of proteins. We have organized this
business into two parts -- Bioprocessing and Laboratory separations. In
Bioprocessing, we produce systems for the purification and production of
biopharmaceuticals on a large scale. In Laboratory separations, we produce
smaller, laboratory-scale systems for the purification and separation of
proteins.

BIOPROCESSING

Our Bioprocessing business helps our customers manufacture modern,
biomolecule-based medicines. We support biopharmaceutical manufacturers by
providing them with scaleable and integrated technologies for purifying
biopharmaceuticals. We also provide services that offer reduced process
development time and cost efficient production of biopharmaceutical medicines,
such as hormones, enzymes, blood clotting factors, vaccines, antibodies, growth
factors and antisense nucleic acids sequences.

Biopharmaceuticals are drugs based on active biomolecules, such as
proteins, peptides or DNA. The first biopharmaceuticals were developed and
produced using chromatography techniques in the late 1970s and early 1980s. The
first drug produced by genetic engineering was launched in 1982. Now there are
over 80 life-saving, biotechnology medicines approved or launched, and more than
360 new biopharmaceuticals are in clinical trials. Furthermore, we expect that
as the relationship between gene products and diseases is clarified, this
pipeline will increase. The active biopharmaceutical substance is usually
purified from genetically engineered bacteria, mammalian cells or yeast or
extracted from natural sources such as blood plasma. Also, several compounds
currently being tested in clinical studies are derived from genetically modified
plants and animals. The purification process requires reliable, high quality
technology. Chromatography is the most powerful technology for producing
biopharmaceuticals on a large scale at the required purity and level of
activity, while reducing the risk of potential contamination by infectious
pathogens.

The ability to be designed-in to the biopharmaceutical purification process
is the key to sustainable revenues and profits in the Bioprocessing business.
Design-in is achieved through biotechnology and pharmaceutical companies using
our purification products successfully during their development phases. We
ensure that methods using our products can be readily scaled up, validated and
registered in full scale manufacturing, so that no time is wasted as the
biopharmaceutical is developed and the customer's requirements increases. Once a
manufacturing process is approved by the FDA, the customer has little incentive
to change because the cost savings are small but demonstrating product
equivalence is time consuming and expensive. Our chromatography media are used
in the

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manufacture of 98% of all approved biopharmaceuticals and are involved in the
vast majority that are in clinical trials.

Apart from demonstrating scalability, we believe our Bioprocessing business
has a competitive advantage based on:

- the reputation we have built in the purification field, since 1959;

- consistent quality assured by ISO 9001 standards;

- largest range of media allowing precise choice, and in some cases
custom design;

- product lines with well known brands, recognized by customers and
regulatory organizations;

- the manufacturing capacity to ensure reliable supply of chromatography
media;

- complete solution, including equipment and regulatory support;

- excellent documentation to support validation and registration; and

- a large dedicated and experienced global sales force.

A key strength in the Bioprocessing business is reliability and a proven
record of results. One of our leading products, Sephadex, which transformed the
industry by bringing a new level of speed and simplicity to purification
techniques, was introduced over 40 years ago and is still a leading brand in
separations media today. Sephadex has had an important role in many scientific
discoveries and has been instrumental in Nobel prize winning research. It is
also widely used in industry, for example, in the production of highly purified
gamma globulin used to treat a variety of diseases including Acquired Immune
Deficiency Syndrome. We now produce the most widely used purification media
based on Sepharose, originally introduced in the 1980s. We also produce other
important products based on Sepharose for the purification of active proteins as
well as system and equipment components used in these processes. These products
are able to address the challenges brought by new types of source materials and
new types of biomolecules such as those being tested for vaccines and antisense
strategies.

Biotechnology innovation continues to drive the Bioprocessing business. For
example, STREAMLINE(TM) provides an efficient and cost effective alternative to
membrane filtration in the initial stages of biopharmaceutical purification.
Since its launch in 1999, there has been substantial growth in sales revenues
for our new synthetic separation media, SOURCE, that offers improved performance
particularly in the purification of smaller protein and peptide products.

In addition to leadership in the protein purification field, we are the
leading supplier of manufacturing systems and reagents for industrial DNA
synthesis, both of which are used by the molecular diagnostic industry and the
emerging antisense industry. Antisense drugs involve the use of nucleic acids
which bind to other target nucleic acids producing a therapeutic effect. These
drugs are also known as oligonucleotide pharmaceuticals because of their use of
short DNA sequences, or oligonucleotides. Our leading patented product,
OligoProcess(TM), enabled the antisense industry to manufacture the first
antisense drugs at a commercially viable cost and scale.

Our reputation, product offerings and support services in the Bioprocessing
business create strong customer relationships. For example we provide Fast
Trak(TM) services to aid customers in complying with FDA requirements by
providing validation support and regulatory support information. Fast Trak also
provides comprehensive training programs for people working in biopharmaceutical
manufacturing and development.

We continue to explore opportunities for the expansion of our Bioprocessing
business. For example, we are planning another stage of the biopharmaceutical
production process through the introduction of viral decontamination systems to
be developed as part of a strategic technology alliance with V.I. Technologies,
Inc.

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LABORATORY SEPARATIONS

In Laboratory separations, we provide laboratory systems for the
purification of proteins, peptides and oligonucleotides. Our product range
covers chromatography systems, which account for approximately 65% of our net
sales in this business line, and chromatography media. We currently have over
20,000 chromatography systems installed and the FPLC(TM) system in the AKTA
brand is so well known that it is used as a generic term for chromatography
media in our industry. Our customers include pharmaceutical and biotechnology
companies and academic and research institutes, the same laboratories that will
be following their increased knowledge of gene structure with studies on the
function and structure of other biomolecules.

Apart from our well known media products, which are also available in
laboratory scale formats, important brands include the AKTA system for
laboratory scale purification and HiTrap(TM) prepacked chromatography columns.
The AKTA platform is under constant development and during 2000 there were
several upgrades and new products, including AKTAprime, a basic chromatography
system, and an advanced fraction collector.

As with Laboratory products, we are seeking to manage the technology life
cycle for our laboratory separations products by linking them to our
Bioprocessing businesses through the drug development design-in process. Our
laboratory separations systems are often used in industry to develop small scale
processes for the purification of biopharmaceuticals.

Our principal Bioprocessing and Laboratory separations products are
summarized below.
<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
--------------------------------- ---------------------------------------- ----------------------------------
PRODUCTS BEING MARKETED
--------------------------------- ---------------------------------------- ----------------------------------
<S> <C> <C>
Sephadex(TM), Sepharose(TM), Chromatographic separation materials Purification of active proteins
SOURCE(TM) used in biopharmaceuticals

STREAMLINE(TM) Expanded bed chromatography system Primary chromatography step used
for purification of active
proteins used in
biopharmaceuticals

Cytodex(TM) Beaded media for cell culture Research and vaccine production

Ficoll(TM), Percoll(TM) Media for cell separation Research applications, in-vivo
treatment

Chromaflow Columns(TM) Production scale chromatography columns Purification of active proteins
BioProcess Systems and systems used in biopharmaceuticals

OligoPilot(TM) Systems for oligonucleotide synthesis Synthesis of oligonucleotides
OligoProcess(TM) for production of
pharmaceuticals and diagnostic
probes*

PRIMER SUPPORT(TM) Solid phase support beads for Synthesis of oligonucleotides
oligonucleotides synthesis for production of
pharmaceuticals and diagnostic
probes*

Amidites Monomers for oligonucleotides synthesis Synthesis of oligonucleotides
for production of
pharmaceuticals and diagnostic
probes*

AKTA(TM)/FPLC Chromatography systems for preparative Research and pharmaceutical
purification of biomolecules methods development

PRODUCTS IN DEVELOPMENT

High flow Protein A High productivity affinity medium Antibody purification

STREAMLINE(TM) reactor/expanded Equipment and medium for expanded bed System for initial capture of
bed absorption biopharmaceuticals from
</TABLE>

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<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREA OF USE
--------------------------------- ---------------------------------------- ----------------------------------
PRODUCTS BEING MARKETED
--------------------------------- ---------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
absorption media production medium

New ion exchange media New chromatography media Novel ion exchange performance
with increased field of
application

AKTA(TM)/AKTA(TM) pilot Laboratory chromatography system Small production scale protein
purification under good
manufacturing practices

New primer support Solid phase support beads Optimized for synthesis of
longer diagnostic probes

Bioselect Customized affinity ligands Monoclonal antibodies
purification

Viral inactivation Viral inactivation media Purification of plasma and
proteins produced from cell
culture

Parallel purification system Chromatography system for parallel Structural genomics
purification of proteins
</TABLE>

-----------

* These products may also be used in the production of future antisense
drugs.

LABORATORY PRODUCTS

We provide a broad range of laboratory research tools and technology to
purify, detect and analyze biological molecules. We differentiate our business
from our competitors by developing and grouping our products around the
experimental procedures, such as nucleic acid assays, used by our customers. We
refer to this as application-based development. We also provide marketing and
technical support. Our product range, reinforced by strong brands,
application-based development and extensive technical support, has enabled us to
become the market leader in the provision of laboratory products for life
science researchers in academia and industry. Our product range consists of over
5,500 products and covers the following application areas:

- gene expression;

- DNA differentiation analysis;

- protein analysis and expression;

- nucleic acid amplification and purification;

- nucleic acid analysis;

- low and medium throughput sequencing; and

- assays.

Within these application areas we have very strong brands, such as
Biotrak(TM), Redivue(TM), Storm(TM), and Ready-to-Go(TM). Our laboratory
products are tailored to meet the specific needs of our research customers for
proven techniques and dependable products to produce quick and reliable research
results. Because of this tailoring, our laboratory products technology follows
the trends in life sciences research. We are actively managing the product life
cycle and are continually evolving our product line in response to our
customers' needs. For example, we are focusing on developing products for
cellular biology research and DNA and RNA analysis using chemiluminescent dye
labeling technologies.

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We are continuing to develop innovative laboratory products, such as the
Typhoon fluorescence scanner used in many life sciences applications. Typhoon,
which was successfully launched in early 2000, offers increased sensitivity and
performance and we believe will help maintain our position as a leader in the
imaging market.

A key component of our strategy for Laboratory products is to focus on
customer service and support for over 100,000 life science researchers using our
products worldwide. We maintain these relationships by focusing on
application-based product development, marketing and providing highly skilled
application and technical support. We are also expanding our customer base in
Laboratory products by targeting pharmaceutical and medical researchers, a
customer base which grows at a faster rate than our traditional academic
research market. Finally we are implementing an Internet-based marketing
strategy for these products. See " -- Marketing and Distribution -- E-business."

A further component of our strategy for Laboratory products is to maximize
overall revenues from our investment in new technology platforms within Drug
discovery by creating later generation products for the general research market.
We refer to this as managing the technology life cycle. By managing the
technology life cycle from drug discovery, we will be able to extend the life of
our branded products as they move through drug discovery into the broader
laboratory products market.

Our principal laboratory products are summarized below, with a variety of
brand improvements and extensions under development.
<TABLE>
<CAPTION>

PRODUCT GROUP TYPE OF PRODUCT PRIMARY AREAS OF USE
-------------------------- ---------------------------------------- -----------------------------------------
<S> <C> <C>
Ready-To-Go(TM) Convenience kits for molecular biology Purification materials for analytical
experimentation and preparative purposes

Redivue(TM) Colored, stabilized formulations of a DNA and protein labeling
range of radioactive nucleotides and amino
acids

Hoefer Electrophoresis and blotting instruments Detecting proteins

Biotrak(TM) Assays Assay kit Drug development and cell biology
research

ALFexpress(TM) Medium throughput DNA sequencing system Mapping DNA base pairs sequence

SEQ4X4(TM) Bench-top DNA sequencing system Mapping DNA base pairs sequence

Hybond(TM) Membranes for blotting Detecting proteins or nucleic acids

Storm(TM) Fluorescent, chemiluminescent and Nucleic acid and protein gel analysis
radiography imaging systems and blot analysis

Radiochemicals Biochemical compounds labeled with Study of cell biology and toxicology
Carbon14, Tritium and Iodine125

ECL(TM) Western Protein detection system for western Protein detection and characterization
Blotting blotting

Typhoon(TM) Multi-color detection imager Wide range of laboratory detection
applications

Ready-to-Run(TM) Electrophoresis system Rapid and easy to use system for
analyzing DNA, especially polymerase
chain reaction, or PCR, products
</TABLE>

SERVICE, AGENCY AND OTHER

Our Service business provides systems support for our instruments. The
business is a global organization with over 270 employees providing
installation, training, maintenance, software upgrade programs, and application
support. Our academic research, biotechnology and pharmaceutical customers have
varied manufacturing and research requirements, and we seek to increase our
customers' productivity by providing service packages tailored to each
particular customer.

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Our primary customers in this business are pharmaceutical and biotechnology
companies, who rely on support agreements for their capital goods. Service
agreements are already well established for Bioprocessing products and AKTA, and
we expect sales for services for our drug discovery products to grow as the
installed base for our systems such as MegaBACE, LEADseeker and Ettan increases.

We plan to capitalize on growth opportunities in the services business by
providing it with a separate management focus from our other business segments.
We plan to take advantage of these opportunities through expansion into more
tailored and wider customer support, more extensive training offerings for
customers learning about new proteomics and genomics systems, and providing
support for software-intensive integrated systems being developed in both Drug
discovery and Bioprocessing.

STRATEGIC ALLIANCES

An important element of our strategy is to aggressively seek strategic
alliances in order to develop a wide spectrum of products. To generate broad
product lines, it is advantageous to license technologies from the scientific
community at large and to enter into strategic alliances in addition to our own
product development efforts. We will continue to seek additional alliances with
major academic research centers and biotechnology and pharmaceutical companies.
We believe that this strategy will enable us to obtain new technologies and
maximize the efficient use of our research and development expenditures. The
table below lists some of our major strategic partners.
<TABLE>
<CAPTION>

STRATEGIC PARTNER TECHNOLOGY PRODUCT
-------------------------------------- ------------------------------- --------------------------------------
<S> <C> <C>
Affibody Technology Sweden AB Ligands Ligands for protein purification

Analytica of Branford, Inc. Mass spectrometry Ettan range

Beckman Coulter Inc. Sequencing technology Separation matrices for capillary
electrophoresis

Cimarron Software Services, Inc. Bioinformatics Laboratory workflow system software

DNA Sciences Microfabrication technology Chip-based sequencing

Dyax Corp. Ligands Peptide ligands for protein
purification

Gyros AB CD-based miniaturization Technology for various miniaturized
drug discovery products which we
refer to as lab on a chip

InforMax, Inc. Bioinformatics Customized software

Molecular Staging, Inc. SNP analysis and other SNiPer
applications of rolling cycle
amplifications

Proteometric LLC Mass spectroscopy Ettan range

Scientific Analysis Instruments Ltd. Mass spectroscopy Ettan range

Uppsala University, Sweden Surface interaction biotechnology Technology development for
separation resins

V.I. Technologies, Inc. Bioprocessing Virus inactivation compounds
</TABLE>

We continue to consider opportunities to acquire, expand and strengthen our
portfolio of intellectual property as part of our ongoing strategy in the
business segments in which we operate. As a result, we review potential

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acquisition and investment opportunities in our business segments from time to
time. Except as otherwise disclosed in this prospectus, we currently do not have
any material commitments or agreements for any acquisition or investments. We
may structure any acquisition or investment, as has been the case historically,
as an acquisition or joint venture or through licensing arrangements. We might
consider making an acquisition or investment if we believe that a transaction
will enhance our portfolio of offered products, particularly where the
transaction is related to the identification and commercialization of innovative
new technologies.

MARKETING AND DISTRIBUTION

MARKETING

We have developed an extensive, worldwide sales and marketing network, with
products sold in more than 120 countries. We have an integrated sales and
marketing organization of approximately 1,600 employees serving all three of our
principal business segments, with sales offices in 31 countries. Our sales and
marketing force is divided into four regional organizations: North America,
Europe, Japan, and International, which includes Latin America, Africa, the
Middle East, Eastern Europe and Asia Pacific except Japan. This organization
gives us good representation in the most important pharmaceutical markets. Our
broad customer base and integrated product offerings allow our sales and
marketing force to generate sales across all three business segments. We have
also established direct marketing through catalog and brochure mailing,
telemarketing and web-based marketing channels, including a comprehensive home
page with associated links.

We believe that our international sales and marketing organization is well
balanced both geographically across the major markets and between central and
local resources and expertise. We also believe that our sales and marketing
strategies, combined with our product development capabilities and established
reputation, have been important factors in the growth of our businesses.

In addition to distributing our own products, which made up 80% of our
total sales in 1999, we also distribute a range of products provided by external
suppliers. These include items such as cloning products supplied by Novagen,
Inc., restriction enzymes supplied by Takara Shuzo Co. Ltd. and analytical
instruments supplied by BioChrom Labs, Inc. We also distribute autoradiography
film supplied under the Kodak brand name worldwide and Affymetrix's gene
expression products in Japan.

E-BUSINESS

We believe that the breadth of the product range and number of customers
for our laboratory products makes this business particularly well suited to the
Internet as a marketing channel. We expect the Internet to bring significant
changes to the market for our laboratory products, with e-commerce enabling
large efficiency gains in the management of the supply chain for both our
customers and us. We intend to complement the improved efficiency in order
processing and invoicing offered by Internet marketing channels through the
development of further e-business services, offering full technical support to
customers. We are investing in new systems and procedures to improve our
existing global web presence to enable simpler on-line purchasing and provide
technical information and advice.

In 1999, we entered into a partnership with SciQuest.com, Inc., a leading
provider of electronic e-commerce services, to sell laboratory products through
its electronic purchasing channels. The SciQuest e-commerce website has been
operating in the United States since February 2000 and has generated $0.5
million in sales to date.

DISTRIBUTION

To complement our global marketing team, we have established a worldwide
distribution network consisting of two central distribution warehouses and two
regional distribution warehouses employing approximately 90 people.
We also have distributors in 54 countries.

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RESEARCH AND DEVELOPMENT

We believe that a substantial investment in research and development is
critical to our overall strategy of driving growth and enabling molecular
medicine. The key drivers for our research and development strategy are our
desire to enable our customers to clarify the gene-function relationship,
understand the molecular basis of diseases and increase the efficiency of the
drug discovery and drug manufacturing processes. All of our research and
development spending decisions are made based on our belief in a technology's
commercial viability and its ability to meet our return on investment criteria.

The return on our research and development investment is demonstrated by
the following list of key systems and products which have been launched over the
last three years:

- MegaBACE sequencer and genotyper;

- Microarray systems;

- SNiPer;

- Ettan series;

- Two dimensional gel electrophoresis system;

- LEADseeker;

- Typhoon;

- Ready-to-Run;

- SOURCE;

- STREAMLINE; and

- AKTAprime.

We employ over 900 scientists in research and development at the following
facilities and specialize in the following scientific areas:

- Amersham, United Kingdom - Molecular biology;

- Cardiff, United Kingdom - High throughput drug screening and cell
biology;

- Piscataway, New Jersey, United States - DNA chemistry and enzymology;

- Uppsala, Sweden - Protein and separation sciences;

- Sunnyvale, California, United States - Genomics and imaging;

- San Francisco, California, United States - Small laboratory
instrumentation and technologies; and

- Tokyo, Japan - Material sciences.

Our research and development process is divided into three stages: the
research stage, the development stage and commercial product support. In the
research stage, we demonstrate technology feasibility, generate intellectual
property and develop new technology platforms. The development stage is
commercially driven and involves the

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development of novel or next generation products and the definition of product
specifications. Commercial product support involves demonstration experiments
for potential customers, providing technology training and consulting and
collaborating with customers' laboratories both before sales and after product
launch.

Our research and development processes are managed at different levels to
enable decisions on resource allocation and prioritization. Project teams report
through a formal structure to an executive team to monitor milestones and
resources, to obtain approval to commence projects and to recommend ending a
project if it is not meeting our objectives. Our executive management is
responsible for devising research and development strategy, licensing
activities, realizing operating efficiencies and setting priorities. The focus
of our research and development processes is guided and reviewed by eminent life
scientists on our scientific advisory board.

For the six-month period ending June 30, 2000, we spent $56.8 million on
research and development, or 12.6% of our net sales. In 1999, we spent $89.6
million on research and development, or 10.4% of our net sales. In 1998 and for
the nine months ended December 31, 1997, we spent $67.9 million, or 9.3% of our
net sales, and $32.8 million, or 8.8% of our net sales, on research and
development. None of our customers sponsored our research and development
expenditures.

MANUFACTURING

We have an established global manufacturing base with six primary
facilities in Piscataway, New Jersey, San Francisco and Sunnyvale, California in
the United States, Uppsala and Umea in Sweden, and Cardiff in the United
Kingdom. We believe we have sufficient manufacturing capacity to meet commercial
demand for our products for the foreseeable future. Our operations at Cardiff
are operated independently on the Nycomed Amersham site and radiochemical
reagents are manufactured by Nycomed Amersham under a contract manufacture
agreement. See "Relationship with Nycomed Amersham and Pharmacia -- Contract
Manufacture Agreements."

Our highly skilled manufacturing staff of over 960 employees have the
technological expertise, significant interaction with our research and
development teams, direct customer contact and flexible skills. Our
manufacturing facilities are co-located with research and development and are
centered around the following technology areas:

- Piscataway - sequencing and nucleotide chemistry (MegaBACE reagents
and Ready-to-Go);

- San Francisco - electrophoresis products;

- Sunnyvale - system prototyping and pilot scale manufacture (MegaBACE
and Microarrays);

- Cardiff - labeling technologies and organic chemistry (LEADseeker
reagents);

- Uppsala - large scale polymer chemistry and serial manufacture of
laboratory chromatography and electrophoresis consumable products; and

- Umea - serial instrument manufacture (AKTA instruments).

Our primary manufacturing facilities optimize material flow and personnel
movement with integrated manufacturing and quality control operations. Access
and safety features are designed to meet federal, state and local health
ordinances. All our manufacturing facilities are accredited to ISO 2000
international standards.

We rely on outside vendors to manufacture a number of components of our
instruments and some reagents which we provide in our systems. We regularly
audit these vendors.

We are implementing a company-wide enterprise resource planning system to
manage and control our material and product inventories. This system encompasses
product costing, materials procurement, production planning and

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scheduling, inventory tracking and control and batch records, with links to
document control for all manufacturing, quality assurance and regulatory
compliance procedures.

RAW MATERIALS

Our manufacturing operations require a wide variety of raw materials,
electronic and mechanical components, chemical and biochemical materials, and
other supplies some of which are occasionally found to be in short supply. We
have dual sourcing for most components and supplies, but where we are dependent
on single sources for a limited number of these items we normally secure
long-term supply contracts.

COMPETITION

The industry segments in which we operate are highly competitive and are
characterized by the application of advanced technology and advanced tools to
sell and support products. Numerous companies specialize in, and a number of
larger companies devote a significant portion of their resources to, the
development, manufacture, and sale of products which compete with those
manufactured or sold by us. Many of our competitors are well-known manufacturers
with a high degree of technical proficiency. In addition, competition is
intensified by the ever-changing nature of the technologies in the industries in
which we are engaged. The markets for our products are characterized by
specialized manufacturers that often have strength in narrow segments of these
markets.

We believe we are one of the principal manufacturers in our field,
marketing a broad range of products. In addition to competing in terms of the
technology that we offer, enabling products for the biotechnology industry and
research, we compete in terms of price, service, reliability, quality and
customer channel management.

DRUG DISCOVERY

Competitors in the Drug discovery business include one company which
competes across the range of drug discovery activities and a range of niche
competitors for specific offerings. A significant, although not exhaustive list
of competitors in Drug discovery are:

- PE Biosystems Group. A range of instruments, consumables and
informatics in the genomics, proteomics and drug screening areas;

- Packard BioScience Company. Instruments for drug screening;

- Affymetrix, Inc. Systems for gene expression analysis;

- The Micromass division of Waters Corporation. Mass spectrometry
instruments;

- Aurora Biosciences Corporation. Products and services for drug
screening; and

- Third Wave Technologies, Inc. Technology for SNP screening.

SEPARATIONS

In general, our Separations business has an estimated market share in
excess of 50% across its full range of products. Major competitors in the
Separations business include Tosoh Corporation of Japan which makes various
types of chromatography media, Millipore Corporation which manufactures
large-scale chromatography equipment and Bio-Rad Laboratories, Inc., which has a
competing range of laboratory scale products. A number of other small and large
life science companies have some media products in their portfolios or
specialize in certain types of media.

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LABORATORY PRODUCTS

The total market for laboratory products covers instruments, reagents and
consumables for all laboratory analytical procedures and experiments. We focus
on specific ranges of products for many selected life science applications and
have an estimated 15% share of the served market, making us a market leader.
Some suppliers such as Fisher Scientific International Inc., Merck & Co., Inc.,
and Sigma-Aldrich Corporation serve the total laboratory products market and
offer several types of products, often including many outsourced products, for
life science markets. A large number of competitors such as Qiagen N.V. and
Promega Biosciences Inc. focus on specific niche life science applications.

INTELLECTUAL PROPERTY

We consider the protection of our proprietary technologies and products to
be important to the success of our business. We rely on a combination of
patents, licenses and trademarks to establish and protect our proprietary rights
to our technologies and products. We also rely on unpatented proprietary
technologies. We have obtained patents in many countries covering significant
products developed through our research and development activities. We currently
own 163 issued patents in the United States and 373 issued patents in other
major industrialized nations, and have 602 patent applications pending.

We believe that we continue to have patent protection for our most
important existing products in our major markets, and, in addition, we have
obtained patents, or anticipate that patents will be granted for a majority of
new products and technologies which are under development. We intend to continue
to file patent applications as we develop new products and technologies.

U.S. patents normally have a term of 17 years from the date of issue for
patents issued from applications filed prior to June 8, 1995 and 20 years from
the date of filing of the application in the case of patents issued from
applications filed on or after June 8, 1995. Patents in most other countries
have a term of 20 years from the date of filing the patent application.

We are party to various exclusive and non-exclusive licensing agreements
with third parties that grant us rights to use key components within our
technologies. We believe that the following licensing agreements, all of which
terminate upon the expiration of the related patents, are important to our
business:

- University of California -- exclusive license to patents relating to
our MegaBACE sequencing systems and Energy Transfer Sequencing Primers
and Terminators;

- Carnegie Mellon University -- exclusive license to patents relating to
our two dimensional electrophoresis systems;

- Harvard University -- exclusive license to patents relating to our
Thermo Sequenase DNA Polymerase;

- California Institute of Technology -- non-exclusive license to patents
relating to our fluorescent sequencing technology; and

- Molecular Staging, Inc. -- exclusive license to patents relating to
our SNiPer product.

We rely in part on trade secret protection of our intellectual property. We
attempt to protect our trade secrets by entering into confidentiality agreements
with third parties, employees and consultants. Employees and consultants also
sign agreements to assign to us their interests in patents and copyrights
arising from their work for us. Employees also agree not to compete unfairly
with us after their employment by using confidential information. However, these
agreements can be breached and, if they were, there may not be an adequate
remedy available to us. Also, a third party may learn our trade secrets through
means other than by breach of our confidentiality agreements, or they could be
independently developed by our competitors.

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BACKLOG

Our total recorded backlog on June 30, 2000 was $59 million. On December
31, 1999 our total recorded backlog was $56 million. We anticipate that all
products included in the current backlog will be delivered before the end of
2000. It is our policy to include in backlog only purchase orders or production
releases that have firm delivery dates within one year. However, recorded
backlog may not result in sales because of cancellation of orders or other
factors.

GOVERNMENT REGULATION

We are not subject to direct governmental regulation other than the laws
and regulations generally applicable to businesses in the jurisdictions in which
we operate, including those governing the handling and disposal of hazardous
wastes and other environmental matters. See " -- Environmental and Other
Regulatory Matters." Our research and development activities as well as our
manufacturing activities involve the controlled use of small amounts of
hazardous materials, chemicals and radioactive compounds. However, significantly
larger quantities of hazardous materials and chemicals are used at two of our
manufacturing facilities. Although we believe that our safety procedures for
handling, using and disposing of such materials comply with applicable
regulations, the risk of accidental contamination or injury from these materials
cannot be completely eliminated.

ENVIRONMENTAL AND OTHER REGULATORY MATTERS

We are subject to various environmental protection and occupational health
and safety laws and regulations in the countries in which we operate. In
addition, in our current operations and over the years, we have handled,
manufactured, used and disposed, and will continue to deal in or otherwise
handle, manufacture, use and dispose of materials and wastes classified as
hazardous or toxic by one or more regulatory agencies.

We have developed a worldwide program of health, safety and environmental
policies and standards. Specifically, the policy commits us to regard health,
safety and the environment as integral to the management of the businesses. The
standards are performance based and clarify management's intent in key areas.
These standards require the sites to develop their own processes and procedures
for achieving compliance and delivering continuous improvement in environmental
and occupational safety and health performance throughout all of our worldwide
operations.

There are inherent risks in handling hazardous or toxic materials and
wastes, and we incur costs to comply with the health, safety and environmental
regulations applicable to our operations. We have no reason to believe that
current and expected expenditures and risks occasioned by these circumstances
are likely to have a material adverse effect on financial condition or results
of operation; however a change in circumstances could result in such a material
adverse effect. The manufacture, handling, storage, sale and disposal of our
products are subject to various environmental laws and regulations. Although we
continue to make capital expenditures for environmental protection, we do not
anticipate being obliged as a result of current laws and regulations to incur
costs which would have a material impact upon our financial condition or results
of operations.

In the United States, the possession, use and distribution of reactor
byproduct radioactive materials are regulated by the Nuclear Regulatory
Commission, or NRC. In states that have entered into an agreement with the NRC
to regulate byproduct material, these so-called Agreement States have
jurisdiction. Naturally occurring and accelerator produced materials are
regulated by individual states, more than half of which are Agreement States.
Regulation is administered through regulations and licenses issued by both the
NRC and these states. Regulatory compliance is monitored and enforced by
inspection and investigation as a result of reported incidents. The U.S.
Environmental Protection Agency also has regulations concerning disposal of
radioactive materials mixed with hazardous waste. Transportation of radioactive
material is regulated by the U.S. Department of Transportation. You should read
"Relationship with Nycomed Amersham and Pharmacia -- Ongoing Arrangements
between APBiotech, Nycomed Amersham and Pharmacia -- Contract Manufacture
Agreements" for a discussion of our potential environmental liability relating
to a Nycomed Amersham site.

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EMPLOYEES

As of June 30, 2000, our employees numbered close to 4,200 with
approximately 2,600 employees based in Europe, 1,090 in North America, 190 in
Asia Pacific, 230 in Japan and 50 in the rest of the world. Many of our
employees are represented by trade unions. We consider our employee relations to
be good and have not experienced any material work stoppages in recent years.

PROPERTY

Our principal executive offices are located in Piscataway, New Jersey.
Listed below are the location of our principal facilities, together with the
form of title, approximate floor space and the principal activities conducted at
such facilities. We consider all the facilities listed below to be reasonably
appropriate for the purposes for which they are used, including manufacturing,
research and development, and administrative purposes. All properties are
maintained in good working order and, in the case of those used for
manufacturing purposes, are substantially utilized on the basis of at least one
shift.
<TABLE>
<CAPTION>

SQUARE (L) LEASED
LOCATION PRINCIPAL ACTIVITIES METERS (O) OWNED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States (Piscataway, New Jersey) Executive offices, commercial, research and 25,000 O
development and manufacturing
United States (Sunnyvale, California - Executive offices, commercial, research and 13,126 L
two sites) development and manufacturing
United States (San Francisco) Commercial, research and development and 6,038 O
manufacturing
England (Buckinghamshire - Executive offices and commercial 4,903 (1)
Amersham Place)
England (Buckinghamshire - Research and development and manufacturing 4,200 (2)
Amersham Laboratories)
Wales (Cardiff) Commercial, research and development and 121,551 (2)
manufacturing
Sweden (Uppsala) Executive offices, commercial research and 105,000 O
development and manufacturing
Sweden (Umea) Manufacturing 13,400 O
Germany (Freiburg) Commercial 5,700 L
Japan (Tokyo) Commercial and research and development 3,700 L
</TABLE>

-------------

(1) Property owned or leased by Nycomed Amersham, but used by APBiotech
pursuant to the general services agreement.

(2) Property owned by Nycomed Amersham, but used for contract manufacturing of
APBiotech's products pursuant to the contract manufacture agreement.

LEGAL PROCEEDINGS

We have various actions pending against the Applied Biosystems Division of
PE Corporation, or ABD, in California, USA. By summons dated November 18, 1997,
we claimed infringement by ABD of U.S. Patent No. 5,688,648 entitled "Probes
Labeled with Energy Transfer Coupled Dyes" invented by Rich Mathies of
University of California, exclusive rights to which are licensed to us. On
October 19, 1998, we filed suit with the U.S. District Court, Delaware, against
Celera Genomics Corporation, a business unit of PE Corporation also for
infringement of U.S. Patent No. 5,688,648. This action has been consolidated
with the action against ABD.

In a decision dated May 19, 2000, the Northern District Court of California
upheld our interpretation of the claims of U.S. Patent No. 5,688,648. This
decision followed a Markman hearing on December 10, 1999 in which the court was
asked for its view of respective constructions by each party of the patent
claims. The subsequent decision of the court in our favor in respect of all the
terms in dispute will be referred to in the trial anticipated to

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take place in January 2001. At the trial, a decision as to whether or not ABD
and Celera infringe U.S. Patent No. 5,688,648 will be dictated by the scope of
the patent as now defined by the decision.

On March 13, 1998, ABD filed a complaint in U.S. District Court Northern
District of California, San Jose Division for patent infringement and a
declaratory judgment against us claiming infringement of U.S. Patent No.
4,811,218 entitled "Real Time Scanning Electrophoresis Apparatus for DNA
Sequencing" and U.S. Patent No. 5,207,886 entitled "Capillary Electrophoresis."
We filed a counterclaim against ABD in these proceedings alleging infringement
by ABD of U.S. Patent No. 5,091,652 entitled "Laser Excited Confocal Microscope
Fluorescence Scanner and Method" (issued to Rich Mathies, assigned to University
of California and exclusively licensed to us) and of U.S. Patent No. 5,459,325
entitled "High-Speed Fluorescence Scanner." By summons dated May 21, 1998, in
U.S. District Court Southern District of New York, we claimed infringement by
ABD of U.S. Patent No. 4,707,235 entitled "Electrophoresis Method and Apparatus
Having Continuous Detection Means."

On September 22, 1999, we moved for an order to file an amended
counterclaim claiming antitrust damage because of fraud by ABD in obtaining U.S.
Patent No. 5,207,886. ABD then withdrew its claim for infringement of U.S.
Patent No. 5,207,886. The Court permitted us to pursue the issue of fraud
regarding U.S. Patent No. 5,207,886.

On May 31, 2000 PE Biosystems announced it had filed suit in the Northern
District of California against us for infringing a patent related to a class of
fluorescent dye compounds used in automated DNA Sequencing processes.

We are vigorously contesting the claims described above. However, it is not
possible to predict with certainty the outcome of this litigation, and while we
do not believe an adverse result would have a material effect on our
consolidated financial position, it could be material to our results of
operations or cash flows for a fiscal year.

We are also involved in various other disputes of a nature considered
typical for our businesses, including those relating to product liability and
infringements of intellectual property rights and validity of patents. Although
the amount of any liability that might arise with respect to any of these
matters cannot be accurately predicted, the resulting liability, if any, will
not in the opinion of the management have a material adverse effect on our
consolidated financial position, results of operations or cash flows.

Although, we vigorously defend all claims, we make provision for potential
liabilities when deemed probable and reasonably estimable, including expenses
that may arise and based on current information and legal advice, adjusted from
time to time according to developments. In defending our own intellectual
property, there is always a risk that failure to prosecute any claim
successfully may result in a court invalidating our patents and the subsequent
loss of our intellectual property. See "Risk Factors -- Risks Related to Our
Intellectual Property."

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding our executive
officers and directors, as of August 31, 2000:
<TABLE>
<CAPTION>

NAME AGE POSITION
---- --- --------
<S> <C> <C>
Sir William M. Castell 53 Chairman
Ronald Long 53 Director
Dr. Andrew Carr 41 Director, Chief Executive Officer
Per-Erik Sandlund 48 Chief Financial Officer
Dr. Mike Hayes 49 Vice President, Research and Development
Dr. Peter Coggins 51 Vice President, Sales and Marketing
Arne Forsell 58 Vice President, Operations
Peter von Ehrenheim 45 Vice President, Separations
Julian Cooper 43 Vice President, Human Resources
William J. Sulinski 59 Vice President, Corporate Development
Nicola Smith 46 Vice President, Corporate Affairs
Giles Kerr 41 Director
Christopher J. Coughlin 48 Director
Mats Gunnar Pettersson 54 Director
</TABLE>

William M. Castell, our Chairman, joined Amersham International in 1989 as
Chief Executive, a position he continues to hold in the merged Nycomed Amersham
plc. Sir William Castell has been Chairman of APBiotech Ltd. since its formation
in 1997. Prior to joining Amersham International, Sir William Castell was
Commercial Director of Wellcome plc. He holds a bachelor's degree in Business
Studies, is a chartered accountant, and a non-executive director of Marconi plc.

Ronald Long, our Deputy Chairman, joined Amersham International in 1990 and
after holding a variety of positions was our Chief Executive Officer until
August 1, 2000. Prior to joining Amersham International, Mr. Long was a director
of Coopers Animal Health and then Managing Director of Calmic International. He
holds a bachelor's degree in Economics and is a member of the Institute of
Personnel & Development.

Andrew Carr, our Chief Executive Officer joined Amersham International in
1987 and spent eight years in a variety of research and development positions in
the United Kingdom. Mr. Carr gained further experience in Amersham's Cleveland,
Ohio facility, first as Manufacturing Director and then as Site Director, before
moving into the commercial function as Vice President of the Cell Biology
business in 1997. He was Vice President of Sales and Marketing with global
responsibility for our sales from 1998, until his appointment as Chief Executive
Officer on August 1, 2000. Mr. Carr holds a first class bachelor's degree in
Biology and a Ph.D. in Zoology.

Per-Erik Sandlund, our Chief Financial Officer, joined Pharmacia Biotech in
1991 as Chief Financial Officer. Mr. Sandlund had previously been President of
System 3R International AB and had earlier held a variety of financial positions
in Sweden and Latin America. He has a bachelor's degree in Economics and
Business.

Mike Hayes, our Vice President, Research & Development, joined APBiotech
Ltd. in April 2000 following a 19 year career with Glaxo Wellcome. From 1995 to
April 2000, Mr. Hayes was Divisional Director, Discovery Technology. He holds a
bachelor's degree in Biochemistry and a Ph.D. in Microbial Biochemistry. He is a
former Chairman of the Centre for Natural Products Research in Singapore and is
non-executive director of Biotica Technology Ltd.

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Peter Coggins, our Vice President, Sales & Marketing, rejoined Amersham
International in the United Kingdom in 1994 as Vice President, Marketing,
following a 10-year period working for biotechnology companies in North America
and Finland. Mr. Coggins has served as the Regional Sales President for both
Europe and North America and as Vice President, Drug discovery Marketing based
in Sunnyvale, California. He holds both a bachelor's degree and a Ph.D. in
Zoology.

Arne Forsell, our Vice President, Operations, joined Pharmacia Biotech in
1990 as President and then served as Deputy CEO following the APBiotech merger
in 1997. Prior to these positions, Mr. Forsell was a management consultant and
held a variety of positions with Atlas Copco in Sweden, Norway and Portugal. Mr.
Forsell is a member of the business council of the Royal Swedish Academy of
Engineering Sciences. He is the chairman of Nordbanken, Region Central and
Northern Sweden and is a director of several companies and foundations in
Sweden. He graduated from the Royal Institute of Technology in Stockholm with a
master of science degree in Civil Engineering.

Peter von Ehrenheim, our Vice President, Separations, joined Pharmacia
Biotech in 1983. Mr. Ehrenheim returned to Sweden from Milwaukee, Wisconsin to
take up this position in 1999 following three years as the U.S. head of
manufacturing and head of the industrial molecular biology business. He holds a
master of science and engineering degree from the Royal Institute of Technology
in Stockholm.

Julian Cooper, our Vice President, Human Resources, joined Amersham
International in the United Kingdom in 1984 and has held a variety of positions
prior to being appointed Director of Human Resources in 1994. Mr. Cooper was
responsible for the APBiotech merger integration process in 1997. He holds a
bachelor's degree in Geography and is a fellow of the chartered institute of
management accounting.

William J. Sulinski, our Vice President, Corporate Development, joined
APBiotech Ltd. in 1998 from Pharmacia & Upjohn, where during his 21-year career
there he held a variety of positions in finance and business development. Mr.
Sulinski has a bachelor's degree in Business Administration and is a certified
public accountant.

Nicola Smith, our Vice President, Corporate Affairs, joined APBiotech Ltd.
in 1997 from Staveley Industries following a career in public and media
relations, business development, and journalism. She has a bachelor's degree in
Mathematics and Biology and a master's degree in Business Administration.

Giles Kerr was a founding member of our board of directors in 1997 and is
Chief Financial Officer of Nycomed Amersham, where he has been employed since
1991. He was previously a partner with Arthur Andersen.

Christopher J. Coughlin was elected to our board of directors in July 2000,
and is Executive Vice President and Chief Financial Officer of Pharmacia, where
he has been employed since 1998. He was previously President of Nabisco
International, Executive Vice President and Chief Financial Officer of Nabisco
Holdings, and Chief Financial Officer of Sterling Winthrop.

Mats Gunnar Pettersson was a founding member of our board of directors in
1997 and is Senior Vice President, Global Mergers & Acquisitions for Pharmacia,
where he has been employed since 1976. After a career as a certified public
accountant, he worked in the pharmaceutical industry in France, Sweden, Italy,
the United Kingdom and the United States.

BOARD COMPOSITION

Our board currently consists of six directors, four appointed by Nycomed
Amersham and two appointed by Pharmacia. As part of the reorganization and upon
consummation of this offering, our board will consist of 11 members: six Nycomed
Amersham nominated directors, two Pharmacia nominated directors and three
independent directors.

78
<PAGE> 79
BOARD COMMITTEES

AUDIT COMMITTEE

The audit committee will consist of the three independent directors. The
audit committee reviews and makes recommendations to the board of directors
regarding our internal accounting and financial controls and our accounting
principles and auditing practices and procedures to be employed in preparation
and review of our financial statements. The audit committee also makes
recommendations to the board concerning the engagement of independent public
auditors and the scope of the audit to be undertaken by these auditors.

DISCUSSION COMMITTEE

In accordance with the terms of the shareholders' agreement with our
current shareholders we have agreed to establish a discussion committee. The
discussion committee will consist of seven members: two independent directors,
two directors nominated by Pharmacia and three directors nominated by Nycomed
Amersham. The quorum for the discussion committee will be three directors: one
nominated by Pharmacia, one nominated by Nycomed Amersham and one independent
director. If it is not possible to form a quorum, a subsequent committee meeting
will be held with a minimum notice of seven calendar days, at which meeting the
quorum will be any two members of the committee.

Before we take any action with respect to any discussion matter, the
discussion committee shall make recommendations to the board concerning this
discussion matter. In this instance, "action" means a final decision, final
commitment, or public statement by the board. Management may take preliminary
steps with regard to a discussion matter prior to review by the discussion
committee. Recommendations by the discussion committee will be confidential and
will not be binding on the board. Discussion matters must be authorized or
approved by a majority of all our directors. A discussion matter is any action
by us with respect to:

- acquisitions or divestitures of securities or assets having a fair
market value, or for consideration having a fair market value, in
excess of $200 million;

- the issuance of securities having a fair market value, or for
consideration having a fair market value, in excess of $200 million;

- dividends on and distributions of securities or assets having a fair
market value in excess of $200 million; or

- incurrence of indebtedness (other than indebtedness incurred pursuant
to any credit facility that has been the subject of a previous report
of the discussion committee) that would cause our aggregate
consolidated indebtedness (excluding the long-term notes to be issued
by us to Nycomed Amersham) to exceed $200 million.

Unless a shorter period of time is agreed by the directors nominated by
Pharmacia, we will have an obligation to furnish the members of the discussion
committee with all documents, papers and information relating to a particular
discussion matter no less than 15 calendar days before the meeting of the
discussion committee at which this discussion matter is being considered. The
discussion committee's recommendation must be made on the day of the discussion
committee's meeting, after which we may take any action regarding the discussion
matter as we deem appropriate, so long as any action is approved by a majority
of our directors.

COMPENSATION COMMITTEE

The compensation committee will consist of one director nominated by
Pharmacia, one director nominated by Nycomed Amersham and one independent
director. The compensation committee reviews and recommends to the board of
directors policies, practices and procedures relating to the compensation of the
officers and other managerial employees and the establishment and administration
of employee benefit plans. The compensation

79
<PAGE> 80
committee also exercises all authority under our employee equity incentive plans
and advises and consults with our officers as may be requested regarding
managerial personnel policies.

NOMINATING COMMITTEE

The nominating committee will consist of two directors nominated by
Pharmacia and two directors nominated by Nycomed Amersham. The nominating
committee will nominate the three independent directors. Decisions of the
nominating committee require approval of a majority of its members.

EXECUTIVE COMMITTEE

The executive committee will consist of members. The executive committee
will have the authority to act as a liaison between the board and executive
management and will exercise such powers as shall be delegated to it by the
board.

DIRECTOR COMPENSATION

Our directors who are not also our officers or employees will be paid an
annual retainer of $ and a fee of $ for each meeting attended of
the board of directors or of a committee of the board.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation paid
to our Chief Executive Officer and our five other most highly compensated
executive officers during our fiscal years ended December 31, 1999, 1998 and
1997.

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
--------------
ANNUAL COMPENSATION PAYOUTS
--------------------------------------------------------- --------------
OTHER
ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION LTIP PAYOUTS
--------------------------- ------- ---------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Ronald Long(1) .............................. 1999 $ 388,800 $ 0(4) $ 39,680(5) $ 217,918
Chief Executive Officer 1998 373,500 162,473 59,898 421,208
1997 315,700 164,000 14,863 0
Andrew Carr(2) .............................. 1999 171,720 25,194 11,029 0
Vice President, Sales and Marketing 1998 149,193 31,540 11,818 0
1997 108,707 6,304 7,477 0
Julian Cooper ............................... 1999 218,700 40,915 22,073 0
Vice President, Human Resources 1998 191,357 70,915 23,864 0
1997 149,199 0 18,873 0
Arne Forsell ................................ 1999 258,570 123,832 6,058 0
Deputy Chief Executive Officer 1998 239,080 236,820 6,655 0
1997 200,140 216,971 7,045 0
Per-Erik Sandlund ........................... 1999 161,031 38,289 2,787 0
Chief Financial Officer 1998 158,592 70,694 0 0
1997 130,208 109,986 2,218 0
Maris Hartmanis(3) .......................... 1999 158,607 40,712 6,301 0
Vice President, Research and Development 1998 159,094 85,386 6,404 0
</TABLE>

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<PAGE> 81
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION PAYOUTS
----------------------------------------------------- -------------
OTHER
ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION LTIP PAYOUTS
--------------------------- ------- ---------- --------- --------------- -------------
<S> <C> <C> <C> <C> <C>
1997 138,298 62,364 6,915 0
</TABLE>

-------------

(1) Mr. Long resigned as Chief Executive Officer of APBiotech Ltd. on August 1,
2000.

(2) Mr. Carr was appointed Chief Executive Officer on August 1, 2000.

(3) Mr. Hartmanis resigned as Vice President, Research and Development on March
31, 2000.

(4) Mr. Long elected to waive an annual bonus payment of $25,896.50 in fiscal
1999.

(5) In order to assist in Mr. Long's relocation to Sweden, Amersham Pharmacia
Biotech AB, Sweden purchased, in June 1998, certain assets on his behalf to
the value of $13,697.21. Mr. Long reimbursed the principal amount in full
in January 2000, together with interest of $1,451.11. The amount of
interest due at the beginning of the year was $468.10 and at the end of the
year was $1,380.14.

EMPLOYMENT AGREEMENTS

At the time of commencement of employment, our executive officers generally
execute standard contracts specifying basic terms and conditions of their
employment. Our employment contracts in the United Kingdom allow us to terminate
the contract upon 12 months' notice and allows the employee to terminate upon
six months' notice. Our employment contracts in Sweden allow either party to
terminate upon six months' notice, however, we are required to pay 12 months'
severance if we terminate an employment agreement for reasons other than a
material breach by the employee. We have entered into an employment agreement
with Mr. Forsell that provides for 18 months' severance pay upon termination of
the contract.

Our executive officers have signed agreements which require them to
maintain the confidentiality of our information. These agreements also prohibit
these officers from competing with us during the terms of their employment and
for one year after by joining or dealing with a direct competitor.

STOCK OPTION PLANS

EXECUTIVE STOCK OPTION PLAN

Prior to consummation of this offering, we will adopt an executive stock
option plan. The executive stock option plan will provide for grants of
incentive stock options to our senior executives. The plan will grant incentive
stock options for U.S. taxation purposes. The purpose of our stock plan will be
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to our senior executives and to
promote the success of our business. At the request of the board of directors,
the compensation committee administers our stock plan and determines the
participants and the terms of options granted, including the exercise price,
number of shares subject to the option and exercisability.

Options granted under the executive stock option plan will vest over four
years, 25% in each year. The executive stock option plan will terminate in 2010,
unless our board of directors terminates it sooner. No options have yet been
issued pursuant to the executive stock option plan. Options granted under the
executive stock option plan will have an exercise price of not less than the
fair market value of the underlying shares on the grant date, and a term of not
more than 10 years.

Our senior executives globally, including our officers and employee
directors, are eligible to participate if they devote substantially the whole of
their working time to their duties with us. Cash awards may also be granted in
jurisdictions where it is not possible to grant stock options. The terms of a
cash award shall be determined by the compensation committee and will, as far as
possible, be similar to the terms of executive stock options.

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<PAGE> 82
Options granted under the executive stock option plan terminate immediately
upon the termination of the participant's status as an employee of our company,
except in the circumstances in which we dispose of the subsidiary or business
which employs the participant, the participant's retirement or his disability or
death. In these circumstances the participant may exercise his option for a
limited period which may not, in any case, exceed 12 months from the date of his
ceasing to be an employee.

STOCK OPTION PLAN

Prior to consummation of this offering, we will adopt a stock option plan.
This plan will provide for the grant of stock options to our employees after the
date of this offering.

No options have yet been issued pursuant to the stock option plan. Options
granted under the stock option plan will normally vest three years from the date
of option grant, provided that the employee remains employed by us. Options
granted under the stock option plan terminate immediately upon the termination
of the participant's status as an employee of APBiotech, unless the employee
leaves by reason of injury, disability, redundancy or retirement in which case
options will terminate at the later of six months after the employee leaves
employment or 42 months from the date of grant. If a participant dies, his
personal representatives can exercise an option within one year of death.

The stock option plan will terminate in 2010, unless our board of directors
terminates it sooner. Our board of directors may also amend the plan in the
future.

EMPLOYEE STOCK PURCHASE PLAN

Prior to the closing of this offering, we will adopt an employee stock
purchase plan. We have reserved a total of shares of common stock for issuance
under the employee stock purchase plan, together with an annual increase in the
number of shares reserved thereunder beginning on the first day of our fiscal
year commencing January 1, 2001 in an amount equal to the lesser of:

- million shares;

- % of our outstanding common stock on the last day of the prior
fiscal year; or

- an amount determined by our board of directors.

Our employee stock purchase plan is administered by the board of directors
and is intended to qualify under Section 423 of the Internal Revenue Code. Our
U.S. employees, including our officers and employee directors but excluding our
five percent or greater stockholders, are eligible to participate if they are
customarily employed for at least 20 hours per week and have been employed by us
for a continuous period of at least three months. Our employee stock purchase
plan permits eligible U.S. employees to purchase common stock through payroll
deductions, which may not exceed the lesser of 10% of an employee's compensation
where compensation is defined on Form W-2, or $25,000 per year.

Our employee stock purchase plan will be implemented in six month purchase
periods. The initial purchase period under our employee stock purchase plan will
begin in January 2001, and the subsequent purchase periods will begin on the
first trading day on or after July 1 and January 1 of each year. The purchase
price of our common stock under our employee stock purchase plan will be 85% of
the lesser of the fair market value per share on either the first day of the
purchase period or on the last day of the purchase period, which is the purchase
date. Each participant will be granted an option on the first day of the
purchase period and the option will continue in effect until the purchase date.
The option will be automatically exercised on each purchase date, unless the
employee notifies us that she or he does not wish to purchase the shares.
Employees may end their participation in a purchase period at any time, and
their participation ends automatically on termination of employment with our
company.

Our employee stock purchase plan will terminate in 2010, unless our board
of directors terminates it sooner.

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<PAGE> 83
U.K. SHARESAVE PLAN

Prior to consummation of this offering, we will adopt a U.K. Revenue
Approved Sharesave (SAYE) share option plan. All of our U.K. employees will be
eligible to participate in the SAYE. The plan is subject to a cumulative maximum
investment of pound sterling 250 per month for each individual. The share
options run for five or seven years. At the end of the chosen option period the
shares may be purchased by the employee at a 20% discount to the share price at
the start of the period. Cash awards may also be granted where it is not
possible to grant stock options. The terms of a cash award shall be determined
by the board of directors and will, as far as possible, be similar to the terms
of SAYE options.

SHARES AVAILABLE FOR STOCK PLANS

The maximum number of shares which may be subscribed under all the stock
plans described above that are normally capable of vesting on or before June
2002 shall be limited to a maximum of 3% of our total issued share capital.

STOCK OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning grants of stock
options and stock appreciation rights, or SARs, made to the executive officers
named in the Summary Compensation Table during our fiscal year ended 1999.

OPTION/SAR GRANTS IN LAST FISCAL YEAR (1999)
<TABLE>
<CAPTION>

POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR OPTION GRANT DATE
INDIVIDUAL GRANT TERM VALUE
----------------------------------------------------- ----------------------- ------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10% PRESENT VALUE
--------------------- ------------ ------------ ---------- ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald Long ........ 18,265 0.49 7.10 May 2009 $ 81,505 $206,551 $132,801.16
Andrew Carr ........ 15,981 0.43 7.10 May 2009 71,313 180,722 116,194.65
Julian Cooper ...... 13,698 0.37 7.10 May 2009 61,125 154,904 99,595.42
Arne Forsell ....... 45,662 1.23 7.10 May 2006 203,760 516,371 331,999.27
Per-Erik Sandlund .. 27,397 0.74 7.10 May 2006 122,255 309,820 199,198.11
Maris Hartmanis .... 27,397 0.74 7.10 May 2006 122,255 309,820 199,198.11
</TABLE>

AGGREGATED OPTION AND SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES

The following table sets forth information concerning option and SAR
exercises by the executive officers named in the Summary Compensation Table
during APBiotech's fiscal year ended 1999.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR (1999)
AND FISCAL YEAR END OPTION/SAR VALUES

83
<PAGE> 84
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR (1999)
AND FISCAL YEAR END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES ACQUIRED ON FISCAL YEAR END (#) FISCAL YEAR END ($)
EXERCISE VALUE REALIZED EXERCISABLE(E)/ EXERCISABLE(E)/
NAME (#) ($) UNEXERCISABLE(U) UNEXERCISABLE(U)
------------------------- ------------------ ------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Andrew Carr ............. 0 0 35,243(E) 225,120(E)
52,501(U) 217,227(U)
Julian Cooper ........... 0 0 177,224(E) 1,389,117(E)
13,698(U) 47,625(U)
Arne Forsell ............ 0 0 147,785(U) 591,393(U)
Per-Erik Sandlund ....... 0 0 88,671(U) 354,836(U)
Maris Hartmanis ......... 0 0 88,671(E) 354,836(E)
</TABLE>

LONG-TERM INCENTIVE PLAN

The following table sets forth information concerning long-term incentive
awards made to the executive officers named in the Summary Compensation Table
during APBiotech's fiscal year ended 1999.

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OTHER PERIOD ---------------------------------------------
OR OTHER UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS IN PAYOUT ($ OR #) ($ OR #) ($ OR #)
------------------------ ------------- ---------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Ronald Long ............ 18,721 June 2002 N/A N/A N/A
Andrew Carr ............ 0 June 2002 N/A N/A N/A
Julian Cooper .......... 9,984 June 2002 N/A N/A N/A
Arne Forsell ........... 16,641 June 2002 N/A N/A N/A
Per-Erik Sandlund ...... 9,984 June 2002 N/A N/A N/A
Maris Hartmanis ........ 9,984 June 2002 N/A N/A N/A
</TABLE>

Awards of performance shares in Nycomed Amersham have been made to
executives under two plans. Vesting of performance shares under the Nycomed
Amersham Long-term Incentive Plan, or LTIP, depends upon the performance of
Nycomed Amersham over a three-year period as measured by the growth in its total
shareholder return relative to the United Kingdom FTSE 100 index of companies.
No shares will vest in the participants unless Nycomed Amersham's total
shareholder return would place it in at least position number 60 among the FTSE
100 companies ranked by total shareholder return and the maximum number of
shares will vest only if the performance would rank it at position number 20 or
better. If the performance conditions are not satisfied in full and an award
does not vest, the performance period may be extended by up to a maximum of two
years.

The vesting of performance shares under the Nycomed Amersham Merger LTIP
depends on achieving various financial targets by December 31, 2000 (with
respect to 75% of each award) and December 31, 2001 (with respect to the balance
of the award).

At December 31, 1999, the value of awards of performance shares in Nycomed
Amersham under the two LTIP plans held by our executives were as follows:
<TABLE>
<CAPTION>

NYCOMED AMERSHAM
NYCOMED AMERSHAM MERGER LTIP
---------------- -----------
<S> <C> <C>
Ronald Long ..... $125,163 $294,664
Julian Cooper ... 68,928 181,032
Arne Forsell .... 114,348 343,252
</TABLE>

84
<PAGE> 85
<TABLE>
<CAPTION>

NYCOMED AMERSHAM
NYCOMED AMERSHAM MERGER LTIP
---------------- -----------
<S> <C> <C>
Per-Erik Sandlund 68,609 205,951
Maris Hartmanis . 68,609 205,951
</TABLE>

PENSION PLANS

The following paragraphs set out the retirement benefits applicable to the
employees specified.

Ronald Long

Prior to January 1, 1999, Mr. Long was paid a remuneration supplement in
lieu of a pension to compensate him for agreed pension entitlements that were
not to be paid directly as a pension. The remuneration committee of Nycomed
Amersham agreed to a change to the arrangements for Mr. Long, from January 1,
1999, which resulted in his being entitled to a total target pension upon
retirement at age 60 of 60% of the weighted average of the last three years'
basic salary. The pension payable by Nycomed Amersham will be this target
pension, less pension benefits earned in previous employments. This pension will
also include the pension secured by Mr. Long from past remuneration supplements.
No further supplements will be paid in lieu of pensions. Approximately
two-thirds of the total target pension will be funded through a combination of
approved and unapproved arrangements. The amount funded for Mr. Long during 1999
was $132,767. The remainder of the pension will be provided on an unfunded basis
and provision is made in our accounts for this payment. The accumulated total
accrued pension amounting to $83,664 represents the accrued portion of the
pension payable to the directors by us, including an amount which can be secured
by past remuneration supplements. The increase in the accrued pension during the
year amounting to $27,988 is calculated as if the new arrangements had been in
place on December 31, 1998.

Andrew Carr and Julian Cooper

Mr. Carr and Mr. Cooper participate in our U.K. pension plan, which has a
retirement age of 63. Mr. Cooper will be entitled annually to two-thirds of his
salary at retirement age. Mr. Carr's annual benefit will be a combination of a
defined benefit of 1.66% of his salary at retirement for each year of employment
and a contribution by us of 7.5% of his salary for each year he is employed.

If Mr. Carr and Mr. Cooper retire after age 60, the benefit payable to them
is their accrued pension. If they retire between ages 50 and 60, the benefit
payable is the accrued pension reduced by 4% for each year that they are under
age 60.

Per-Erik Sandlund

Mr. Sandlund's retirement age is 60. His retirement benefits will be
provided in Sweden. He is a member of the Ordinary Retirement Scheme and an
Early Retirement Scheme. The Ordinary Retirement Scheme requires a company
contribution of 20% of base pay and average bonus over a three-year period up to
a maximum which is currently 1,865,000 Swedish Kroner per year. The
contributions go to a pension plan selected by the employee. The pension is
payable from age 65 in addition to social security benefits. The early
retirement plan provides a pension of 70% of pensionable earnings (defined as
base pay and average bonus over a three-year period) up to a maximum of
currently 1,865,000 Swedish Kroner per year. This benefit is funded by the
employer. Benefits are payable from ages 60-65 and any social security benefits
would be offset. The Early Retirement Scheme also provides for continued
contributions by us to the Ordinary Retirement Scheme up to age 65.

Arne Forsell

Mr. Forsell's retirement age is 60. His retirement benefits will be
provided in Sweden. Mr. Forsell is entitled to an early retirement pension
payable from age 60-65 and a retirement pension payable after age 65.

85
<PAGE> 86
The early retirement pension is 70% of pensionable earnings defined as base
pay and average bonus over a three year period up to a maximum which is
currently 1,865,000 Swedish Kroner per year. Any social security benefits would
be offset. The retirement pension is 40% of pensionable earnings as defined
above, less the social security benefits payable.

SCIENTIFIC ADVISORY BOARD

We share a scientific advisory board with Nycomed Amersham made up of
eminent scientists with a wide range of experience in life sciences or imaging.
Members of the advisory board evaluate our research program, recommend personnel
to us and advise us on technology trends and related matters. The current
members of the scientific advisory board are listed in the following table:
<TABLE>
<CAPTION>
ADVISOR INSTITUTION
------------------------------------------------- ----------------------------------------------
<S> <C>
Dr. Michael J. Crumpton CBE FRS, Chairman of the Formerly, Director of Research Imperial Cancer
Scientific Advisory Board Research Fund

Dr. David Barker Illumina Inc, San Diego, USA

Dr. Scott E. Fraser Director, Biological Imaging Center

Professor Carl-Henrik Heldin Ludwig Institute for Cancer Research, Sweden

Dr. David J. Lomas Lecturer/Honorary Consultant Radiologist
University of Cambridge

Professor Richard A. Mathies Professor of Chemistry
University of California, Berkeley

Sir Keith Peters Regius Professor of Physics
University of Cambridge

Professor Charles C. Richardson Professor of Biological Chemistry
Harvard Medical School

Professor James E. Rothman Vice Chairman
Sloane-Kettering Institute, New York

Dr. George R. Stark Chairman, Lerner Research Institute
The Cleveland Clinic Foundation, Cleveland, USA

Professor John A. Todd Professor of Medical Genetics
University of Cambridge
</TABLE>

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<PAGE> 87
PRINCIPAL STOCKHOLDERS

The following table sets forth information about the beneficial ownership
of our common stock and Class B common stock (giving effect to the
reorganization) as of __, 2000 and as adjusted to give effect to this offering.
In accordance with the rules of the SEC, beneficial ownership includes voting or
investment power with respect to securities and includes shares issuable
pursuant to stock options that are exercisable within 60 days of __, 2000. The
following table is based on shares of common stock and shares of
Class B common stock outstanding as of __, 2000, and shares of common
stock and shares of Class B common stock outstanding after the
completion of this offering, assuming no exercise of the underwriters'
over-allotment option. To our knowledge, the entities named in the table have
sole voting and investment power with respect to all shares of common stock.
<TABLE>
<CAPTION>

SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE THE OFFERING OWNED AFTER THE OFFERING
------------------------- ------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER % NUMBER %
------------------------------------- -------- ----- -------- -----
<S> <C> <C> <C> <C>
Nycomed Amersham plc(1)
Amersham Place, Little Chalfont
Buckinghamshire
England HP7 9NA
Pharmacia Corporation(2)
100 Route 206 North
Peapack, New Jersey 07977
</TABLE>

------------

(1) Represents ownership of common stock.

(2) Represents ownership of Class B common stock.

87
<PAGE> 88
RELATIONSHIP WITH NYCOMED AMERSHAM AND PHARMACIA

FORMATION OF APBIOTECH

On August 5, 1997, the Life Science division of Nycomed Amersham (formerly
Amersham International) was renamed Amersham Pharmacia Biotech and its
operations were transferred to various legal entities owned by APBiotech Ltd., a
newly formed holding company and a subsidiary of Nycomed Amersham. APBiotech
Ltd. then merged with Pharmacia Biotech, a Swedish-based biotechnology supply
business previously owned by Pharmacia (formerly Pharmacia & Upjohn). The merger
was accounted for under the purchase method of accounting. In addition, Nycomed
Amersham and Pharmacia entered into a number of other agreements, including a
shareholders' agreement relating to the corporate governance and operation of
our business, a general services agreement and contract manufacture agreements.
Nycomed Amersham and Pharmacia also entered into trademark license agreements
with us permitting the use of the Nycomed Amersham names and corporate logos. As
part of this transaction, the shareholder arrangements between Nycomed Amersham
and Pharmacia will be changed, the corporate logos will be transferred, and a
corporate reorganization will be implemented. See " -- Ongoing Arrangements
between APBiotech, Nycomed Amersham and Pharmacia -- The Shareholders'
Agreement" and "Description of Capital Stock."

Since our formation, we have been run as a separate legal entity. Prior to
the closing of our reorganization and this offering, Nycomed Amersham controlled
55% and Pharmacia controlled 45% of our issued share capital and we were
consolidated as a subsidiary of Nycomed Amersham. Immediately after this
offering and the completion of the reorganization, Nycomed Amersham's percentage
of voting rights in our outstanding common stock will be reduced to
approximately 45%, as described below, but we will continue to be consolidated
with the Nycomed Amersham group. Pharmacia's percentage of the voting rights in
our outstanding common stock will remain the same.

For regulatory reasons, various assets of Nycomed Amersham's Life Science
division have not been transferred to us as specified in the contribution
agreement. In those cases, until the necessary regulatory approvals are
obtained, Nycomed Amersham will continue to supply products and carry out
research and development for us at cost in accordance with the contract
manufacture agreements. These agreements effectively transfer the financial
benefit of those operations to us. Nycomed Amersham will also continue to supply
some services to, and continue to distribute products on our behalf.

Nycomed Amersham and Pharmacia have each agreed to indemnify us in relation
to defined environmental and patent matters.

CREATION OF DELAWARE HOLDING COMPANY

APBiotech Inc, a recently formed Delaware corporation, was created in
connection with this offering to issue the shares in this offering and become
the holding company for our operating businesses. The formation of APBiotech
Inc, the restructuring of the shareholder arrangements and share ownership,
revisions to our existing capital structure, including the issuance of two
classes of stock, and changes to certain other existing arrangements with
Nycomed Amersham are all part of the reorganization. The reorganization will be
completed just prior to the closing of this offering.

As part of our reorganization, Nycomed Amersham will contribute 55% of the
ordinary shares of APBiotech Ltd. to APBiotech Inc in return for shares of its
common stock and three long-term notes equal to the value of the shares expected
to be sold in this offering. The notes will mature in 20 years and one will
carry a floating market interest rate and two will carry a fixed market interest
rate. Pharmacia will contribute 39.4% of the ordinary shares of APBiotech Ltd.
to APBiotech Inc in return for shares of its Class B common stock. Pharmacia's
German subsidiary will continue to directly own 5.6% of the ordinary shares of
APBiotech Ltd.

After completion of the reorganization and this offering, Nycomed
Amersham's percentage of control over the voting rights in our outstanding
common stock will be reduced from 55% to approximately 45% and Pharmacia's

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percentage of voting control will remain at 45%. Due to arrangements under the
shareholders' agreement and Nycomed Amersham's voting position, Nycomed Amersham
will control our board of directors, and we will continue to be consolidated as
its subsidiary. Nycomed Amersham and Pharmacia have structured the
reorganization in this manner in order to accomplish their goals of enabling our
future growth and development by creating a public company.

ONGOING ARRANGEMENTS BETWEEN APBIOTECH, NYCOMED AMERSHAM AND PHARMACIA

GENERAL SERVICES AGREEMENT

Under this agreement, Nycomed Amersham has agreed to provide us with all
the services which are necessary to run our business in the current manner,
including warehousing, freight and other transportation services, computer
systems and software, professional and accounting staff and insurance.

Nycomed Amersham has also agreed under the terms of the general services
agreement, subject to some limitations, to indemnify us if we incur any
liability arising out of its negligence in providing the services. We have
agreed to indemnify Nycomed Amersham against third party claims (other than
those arising from Nycomed Amersham's negligent acts or omissions). There is no
limit to the amount of our indemnification.

The general services agreement contains customary termination events.
Additionally, Nycomed Amersham may terminate the agreement immediately on the
sale of any interest in us which results in Nycomed Amersham ceasing to hold an
interest of at least 50% of the voting rights in the shares of APBiotech.
Nycomed Amersham and we have agreed to waive this termination provision.
Following termination of the general services agreement, we have an obligation
to pay Nycomed Amersham an amount which decreases over a number of months in
respect of the continuing costs of the terminated services.

CONTRACT MANUFACTURE AGREEMENTS

Under the contribution agreement, Nycomed Amersham retained manufacturing
sites at Cardiff and Amersham Laboratories. Nycomed Amersham continues to
manufacture products at these sites for us and carries out research and
development at the sites as requested by us.

Nycomed Amersham has also agreed under the terms of the contract
manufacture agreements, subject to some limitations, to indemnify us if we incur
any liability arising out of its negligence in performing its obligations. We
have agreed to indemnify Nycomed Amersham against third party claims, other than
those arising from Nycomed Amersham's negligent acts or omissions. There is no
limit to the amount of our indemnification.

The agreement in respect of the Cardiff site was for an initial term of one
year, and continues until such time as the Nuclear Installations Inspectorate,
or NII, grants a license to us under the Nuclear Installations Act 1965 with
respect to the Cardiff site and Nycomed Amersham is able to transfer title to
the site to us. The agreement with respect to the Amersham Laboratories site has
separate termination clauses for manufacturing services and for research and
development services. The manufacturing provisions for the Amersham Laboratories
site have an initial term of seven years (through August 4, 2004), renewable for
one or more further terms of five years. Notice of renewal must be given two
years before the end of the initial term. The initial term of the research and
development provisions runs until December 31, 2000, and thereafter may be
renewed for further periods of 12 months, each on six months' prior notice.
However, this agreement is terminable at any time after the NII grants a license
to us with respect to the Amersham Laboratories site and Nycomed Amersham
transfers title to the site to us. Following termination of the agreement, we
have agreed to pay Nycomed Amersham an amount which decreases over a number of
months with respect to the continuing costs of the terminated services.

Nycomed Amersham retains any liability relating to decommissioning of the
Cardiff site for the period prior to August 4, 1997. In the event that the
Nuclear Installations Inspectorate agrees to grant us a nuclear site license and
the Cardiff site is transferred to us or we terminate the contract manufacture
agreement relating to the Cardiff site,

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we have the obligation to reimburse Nycomed Amersham for decommissioning and
waste disposal costs relating to the period after August 4, 1997. We are
currently in discussions with Nycomed Amersham regarding certain amendments to
this agreement.

THE SHAREHOLDERS' AGREEMENT

In connection with this offering and the reorganization, we, Nycomed
Amersham and Pharmacia will execute a new shareholders' agreement to govern our
and their rights. This agreement will have a significant impact on our corporate
governance. In addition to the shareholders' agreement, our certificate of
incorporation and bylaws will also contain provisions relating to corporate
governance and rights relating to directors and shareholders.
See "Description of Capital Stock."

Our certificate of incorporation provides that any corporate actions which
require shareholders' approval must be approved by a 662/3 vote of our
shareholders. This means that no shareholders' resolution can be approved unless
both of our principal shareholders approve it. Our new shareholders will have
little influence, therefore, over resolutions or events that require shareholder
approval under Delaware law. See "Description of Capital Stock."

COMPOSITION OF BOARD OF DIRECTORS

Pharmacia has the right to nominate two directors to our board of directors
so long as Pharmacia beneficially owns Class B common stock representing an
interest in our outstanding common stock that is more than 10%. Nycomed Amersham
has the right to nominate six directors to our board of directors, including the
Chairman, for so long as Nycomed Amersham beneficially owns common stock
representing an interest in our outstanding common stock that is more than 35%.
In addition, at all times, our board will include three independent directors
nominated by the nominating committee.

At any time that Pharmacia's ownership of Class B common stock represents
an interest that is less than 10%, Pharmacia will cause its designees to resign
from our board of directors. After the conversion of all its outstanding shares
of our Class B common stock into common stock in accordance with our certificate
of incorporation, Pharmacia will no longer have the right to nominate or elect
our directors and we will reduce our board from eleven to nine directors. From
and after that time, our directors will be elected by a plurality vote of the
holders of common stock. Each Pharmacia director serving on the board at that
time shall continue to hold office for the unexpired portion of that director's
term.

Directors will be elected to serve one year terms or until their successors
are elected. Nycomed Amersham and Pharmacia have agreed to vote their shares in
favor of the other's nominees to our board of directors and have given
irrevocable proxies to each other to ensure that this vote is enforced.

PHARMACIA APPROVAL REQUIRED FOR CERTAIN ACTIONS

All board resolutions will be approved by a simple majority. Our
certificate of incorporation provides, however, that without the approval of at
least one of the directors elected by Pharmacia, our board will not approve:

- acquisitions or divestitures of securities or assets having a fair
market value, or for consideration having a fair market value, in
excess of the protection value, as described below;

- the issuance of securities having a fair market value, or for
consideration having a fair market value, in excess of the protection
value;

- dividends and distributions of securities or assets having a fair
market value in excess of the protection value;

- a material change in our line of business;

- the dissolution or liquidation of our company or APBiotech Ltd.; or

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- the issuance of equity securities after the time that our
reorganization and this offering are completed until April 1, 2002.

We refer to each of the above events as a "protective matter."

For purposes of the above, "protection value" means an amount in cash equal
to 25% of our "aggregate notional market capitalization." Aggregate notional
market capitalization means the product of:

- the average of the closing bid prices for our common stock for the 20
consecutive trading days prior to the date on which the protective
matter is voted on by our board, referred to as the determination
date, multiplied by

- the sum of (A) the number of shares of our common stock issued and
outstanding as of the determination date, plus (B) the number of
shares of our common stock issuable at any time upon conversion of the
Class B ordinary shares of APBiotech Ltd. and shares of our Class B
common stock issued and outstanding as of the determination date.

The provisions of the shareholders' agreement described under " --
Pharmacia Approval Required for Certain Actions" terminate upon Pharmacia owning
less than 10% of our stock.

NOMINATION OF DIRECTORS

The nomination of any person not designated by Nycomed Amersham or
Pharmacia for director requires the approval of a majority of the nominating
committee.

NYCOMED AMERSHAM AND PHARMACIA -- RIGHT TO MAINTAIN PERCENTAGE OWNERSHIP IN OUR
STOCK

We are now and expect to continue to be a subsidiary of Nycomed Amersham's
consolidated group. In order to preserve our status as a subsidiary of this
consolidated group, the shareholders' agreement contains provisions which permit
Nycomed Amersham and Pharmacia to subscribe for new shares in order to maintain
ownership thresholds in our stock. Nycomed Amersham will have subscription
rights in the event we issue equity securities, other than upon exercise of
executive and employee stock options not in excess of 3% of our common stock
outstanding immediately following the reorganization, which will permit Nycomed
Amersham to maintain ownership at its then existing share ownership level.
Pharmacia will have subscription rights in the event we issue equity securities,
other than upon exercise of executive and employee stock options not in excess
of 3% of our common stock outstanding immediately following reorganization, to
the extent necessary to permit Pharmacia to retain at least a 20% equity
interest in us.

These provisions of the shareholders' agreement may have the effect of
limiting our ability to use our capital stock as consideration for acquisitions
or otherwise.

The shareholders' agreement also contains provisions which give Nycomed
Amersham the option to purchase our shares from Pharmacia. Between July 1, 2002
and December 31, 2002, Nycomed Amersham has the option to purchase shares from
Pharmacia equal to at least 33.33% of the shares held by Pharmacia immediately
following the reorganization, but not more than 44.44%. During the same period,
Pharmacia must retain at least 33.33% of its shares. Between January 1, 2004 and
June 30, 2004, Nycomed Amersham has the option to purchase all, but not less
than all, of the shares held by Pharmacia.

REGISTRATION RIGHTS

We have agreed that, at the request of Nycomed Amersham or Pharmacia, we
will file one or more registration statements under the Securities Act in order
to permit Nycomed Amersham and Pharmacia to offer and sell shares of our common
stock. Each of Nycomed Amersham and Pharmacia are entitled to demand
registration rights and will be permitted to "piggyback" on any registration
statement to sell our shares filed by us, including due to a

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demand registration. The initial demand right may not be exercised until 180
days after the date of the reorganization. We have agreed to use our best
efforts to facilitate the registration and offering of those shares designated
for sale by Nycomed Amersham and/or Pharmacia.

We have the right to postpone the filing or effectiveness of a registration
statement for a period of up to 45 days in any nine-month period if:

- we have filed a registration statement with respect to securities to
be distributed in an underwritten public offering and we have been
advised by the lead or managing underwriter that an offering by
Nycomed Amersham or Pharmacia would materially and adversely affect
the offering of our securities, or

- we are in possession of material non-public information concerning a
business combination transaction, the disclosure of which would not be
in our best interest.

Generally, all expenses related to the performance by us of our obligations
with respect to the registration of our shares held by Nycomed Amersham and
Pharmacia will be paid by us. In addition, we are only required to pay for one
registration within any six-month period. We and Nycomed Amersham and Pharmacia
each have agreed to customary indemnification and contribution provisions with
respect to liability incurred in connection with these registrations.

FINANCING ARRANGEMENTS

Since our formation, Nycomed Amersham has provided most of our financing
through uncommitted intra-group loan facilities with our operating companies.
These uncommitted arrangements will continue on a smaller scale after the
reorganization and this offering. Our core financing needs, however, will be met
by a committed long-term intra-group facility, which we intend to enter into
subsequent to our completion of this offering.

UNCOMMITTED INTRA-GROUP FACILITY AGREEMENTS

Accounts are held by our subsidiaries in a variety of currencies with
Nycomed Amersham's Treasury department. Debit balances on accounts are charged
at one month LIBOR rates plus a margin. Credit balances on accounts will earn a
one month LIBID rate for the currency of that account less a margin of 0.5% for
functional currencies and 1.00% for all other currencies. The interest rate is
established reference to the relevant LIBOR and LIBID rates available on the
first working day of the calendar month. These interest rates may be changed to
another benchmark rate as is agreed, provided that the new rate will reflect
interest rates of the relevant currency.

Interest is calculated each month and is applied in arrears to the relevant
accounts on the first working day of the calendar month, or at other intervals
as agreed. Any application of interest to the accounts is made net of
withholding tax at the rate applicable under the relevant treaty.

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DESCRIPTION OF CAPITAL STOCK

The following descriptions are summaries of the material terms of our
certificate of incorporation and bylaws which will be in effect on
implementation of the reorganization. Reference is made to the more detailed
provisions of, and such descriptions are qualified in their entirety by
reference to, the certificate of incorporation and bylaws, copies of which are
filed with the SEC as exhibits to the registration statement of which this
prospectus is a part, and applicable law.

GENERAL

Our authorized capital stock consists of shares of common stock,
shares of Class B common stock and shares of preferred stock. The common
stock and Class B common stock are collectively referred to as common shares in
this document. All of our Class B common stock will be held by Pharmacia.

COMMON STOCK

At the completion of the offering there will be shares of common stock
outstanding, assuming no exercise of the underwriters' over-allotment option and
no exercise of outstanding options. The holders of our common stock are entitled
to one vote per share on all matters to be voted upon by the shareholders,
except that upon giving the legally required notice, shareholders may cumulate
their votes in the election of directors. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive any pro rata dividends, which are declared by the board of
directors out of funds legally available for the payment of dividends. We do not
expect to pay dividends on our common stock in the foreseeable future. See
"Dividends." In the event of liquidation, dissolution or winding up of our
company, the holders of common stock are entitled to share pro rata in all
assets remaining after payment of liabilities, subject to prior distribution
rights of any outstanding preferred stock. There are no redemption or sinking
fund provisions applicable to the common stock. All outstanding shares of common
stock are fully paid and non-assessable, and the shares of common stock to be
issued upon completion of this offering will be fully paid and non-assessable.

CLASS B COMMON STOCK

Pharmacia, as the holder of Class B common stock, is entitled to 1.14 votes
per share on all matters to be voted upon by the shareholders, provided,
however, that following the first exchange of any common stock of APBiotech Ltd.
for a share of Class B common stock pursuant to the shareholders' agreement, the
holder of Class B common stock will be entitled to one vote per share. The
holders of the majority of the outstanding shares of Class B common stock may
request that each of the outstanding shares of Class B common stock, having one
vote per share, be converted into the same number of shares of common stock.
Upon any sale or other disposition of shares of Class B common stock by
Pharmacia or its affiliates, except for transfers to affiliates, the shares will
automatically be converted into shares of common stock on a share for share
basis. In addition, all the outstanding shares of Class B common stock will
automatically convert into shares of common stock on a share for share basis
when the holders of Class B common stock own less than 10% of all outstanding
shares of common stock.

PREFERRED STOCK

The board of directors has the authority to issue the preferred stock in
one or more series and to fix the rights, preferences, privileges and
restrictions of the preferred stock, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of a series, without further vote or action by the shareholders. The
issuance of preferred stock may have the effect of delaying, deferring or
preventing a change in control of our company without further action by the
shareholders and may adversely affect the voting and other rights of the holders
of common stock. We currently have no plans to issue any preferred stock.

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ANTI-TAKEOVER EFFECTS OF DELAWARE LAW

Following consummation of this offering, we will be subject to the
"business combination" provisions of Section 203 of the General Corporation Law
of the State of Delaware. In general, this provision prohibits a publicly held
Delaware corporation from engaging in various "business combination"
transactions with any interested stockholder for a period of three years after
the date of the transaction in which the person became an interested
shareholder, unless

- the transaction is approved by the board of directors prior to the
date the interested stockholder obtained such status;

- upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced; or

- on or subsequent to the date the stockholder became an interested
stockholder, the business combination is approved by the board of
directors and authorized at an annual or special meeting of
shareholders by the affirmative vote of at least 66"% of the
outstanding voting stock which is not owned by the interested
shareholder.

A "business combination" is defined to include mergers, asset sales and
other transactions resulting in financial benefit to a shareholder. In general,
an "interested shareholder" is a person who, together with affiliates and
associates, owns or within the past three years owned 15% or more of a
corporation's voting stock. The statute could prohibit or delay mergers or other
takeover or change in control attempts with respect to our company and,
accordingly, may discourage attempts to acquire us even though such a
transaction may offer our shareholders the opportunity to sell their stock at a
price above the prevailing market price.

PROVISIONS OF APBIOTECH'S CERTIFICATE OF INCORPORATION AND BYLAWS

Our certificate of incorporation provides that any person purchasing or
acquiring an interest in shares of our capital stock is deemed to have consented
to the provisions relating to intercompany agreements and transactions with
interested parties and corporate opportunities described below. The following
provisions of our certificate of incorporation may only be repealed or amended
by a 66"% vote of our shareholders.

For purposes of the following description, we, us or our company includes,
all corporations and other entities in which we own 50% or more of the
outstanding voting interests, and Nycomed Amersham or Pharmacia includes all
corporations and other entities that are "affiliates" of Nycomed Amersham or
Pharmacia within the meaning of Rule 12b-2 under the Exchange Act.

COMPETITION BY NYCOMED AMERSHAM OR PHARMACIA WITH US; CORPORATE OPPORTUNITIES

Our certificate of incorporation provides that Nycomed Amersham and
Pharmacia have no duty to refrain from engaging in the same or similar
activities or lines of business as we engage in. If either Nycomed Amersham or
Pharmacia learns of a potential matter that may be a corporate opportunity for
both Nycomed Amersham or Pharmacia and us, Nycomed Amersham and Pharmacia have
no duty to communicate or offer this opportunity to us. In addition, Nycomed
Amersham and Pharmacia will not be liable to us or our shareholders for breach
of any fiduciary duty if Nycomed Amersham and Pharmacia pursue or acquire the
corporate opportunity or do not communicate it to us.

In the event that a director, officer or employee of our company who is
also a director, officer or employee of Nycomed Amersham or Pharmacia acquires
knowledge of a corporate opportunity, such director, officer or employee shall
act in good faith in a manner consistent with the following policy:

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- a corporate opportunity conceived by or offered to any person who is a
director but not an officer of ours and who is also an officer
(whether or not a director) of Nycomed Amersham or Pharmacia shall
belong to Nycomed Amersham or Pharmacia unless, in the case of an
officer, the opportunity is expressly offered, in writing, to this
person primarily in his or her capacity as a director of our company,
in which case the opportunity shall belong to us;

- a corporate opportunity offered to, or conceived by, any person who is
an officer of our company (whether or not a director of our company)
and who is also a director but not an officer of Nycomed Amersham or
Pharmacia shall belong to us, unless, in the case of an offer, the
opportunity is expressly offered, in writing, to this person primarily
in his or her capacity as a director of Nycomed Amersham or Pharmacia,
in which case the opportunity shall belong to Nycomed Amersham or
Pharmacia and

- a corporate opportunity offered to any other person who is either an
officer of both our company and Nycomed Amersham or Pharmacia or a
director of both our company and Nycomed Amersham or Pharmacia and not
an officer of either company, shall belong to that company or to us if
the opportunity is expressly offered to, in writing, or conceived of
by, this person primarily in his or her capacity as an officer or
director of our company or of Nycomed Amersham or Pharmacia,
respectively;

otherwise, the opportunity shall belong to us.

Our certificate of incorporation also provides that any corporate
opportunity that belongs to Nycomed Amersham or Pharmacia or to us shall not be
pursued by the other party. If the corporate opportunity is not pursued
diligently and in good faith within a reasonable period of time, the other party
may pursue such corporate opportunity.

Certain of the foregoing provisions of our certificate of incorporation, as
they relate to Pharmacia, expire on the date that Pharmacia ceases to own at
least 10% of our outstanding shares of common stock and no person who is a
director or officer of our company is also a director or officer of Pharmacia.

LIMITATION ON DIRECTORS' LIABILITIES

Our certificate of incorporation limits, to the fullest extent permitted by
Delaware corporate law, the personal liability of directors for monetary damages
for breach of their fiduciary duties.

Section 145 of the General Corporation Law of the State of Delaware permits
us to indemnify officers, directors or employees against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with legal proceedings if he or she acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to the best interests of the
corporation, and, with respect to any criminal act or proceeding, had no
reasonable cause to believe his or her conduct was unlawful, provided that with
respect to actions by, or in the right of the corporation against, those
individuals, indemnification is not permitted as to any matter as to which that
person is adjudged to be liable for negligence or misconduct in the performance
of his or her duty to the corporation, unless, and only to the extent that, the
court in which the action or suit was brought determines upon application that,
despite the adjudication of liability, but in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper. Individuals who are successful in the
defense of any action are entitled to indemnification against expenses
reasonably incurred in connection therewith.

Our board of directors will provide similar indemnification to our
officers, employees and agents as they deem appropriate and as authorized by
Delaware law.

We plan to purchase insurance on behalf of any director, officer, employee
or agent against any expense incurred in his or her capacity.

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LISTING

We will apply to have the common stock approved for quotation on the Nasdaq
National Market under the symbol "APBI."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock is .

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SHARES ELIGIBLE FOR FUTURE SALE

The shares of our common stock sold in this offering, or shares if
the underwriters exercise their over-allotment option in full, will be freely
tradable without restriction under the Securities Act of 1933, as amended, or
the Securities Act, except for any shares which may be acquired by our
affiliates, as that term is defined in Rule 144 under the Securities Act. These
shares will remain subject to the resale limitations of Rule 144.

The shares of our common stock and class B common stock that will continue
to be held by Nycomed Amersham and Pharmacia after the offering constitute
"restricted securities" within the meaning of Rule 144, and will be eligible for
sale by Nycomed Amersham and Pharmacia in the open market after the offering,
subject to contractual lock-up provisions and the applicable requirements of
Rule 144, both of which are described below. The sale of shares of common stock
and Class B common stock by Nycomed Amersham and Pharmacia are subject to
certain limitations agreed in the shareholders' agreement, including the
obligation of Pharmacia to retain certain shares subject to the Nycomed Amersham
option exercisable in 2002 and certain tag-along rights and rights of first
refusal. We have granted registration rights to Nycomed Amersham and Pharmacia.
See " -- Registration Rights Agreement" below.

Generally, Rule 144 provides that a person who has beneficially owned
restricted shares for at least one year will be entitled to sell on the open
market in brokers' transactions within any three-month period a number of shares
that does not exceed the greater of:

- 1% of the then outstanding shares of common stock; and

- the average weekly trading volume in the common stock on the open
market during the four calendar weeks preceding such sale.

Sales under Rule 144 are also subject to post-sale notice requirements and
the availability of current public information about the company.

In the event that any person, other than Nycomed Amersham and Pharmacia,
who is deemed to be an affiliate purchases shares of our common stock in the
offering or acquires shares of our common stock pursuant to an employee benefit
plan, the shares held by that person are required under Rule 144 to be sold in
brokers' transactions, subject to the volume limitations described above. Shares
properly sold in reliance upon Rule 144 to persons who are not affiliates are
freely tradable without restriction.

Sales of substantial amounts of our common stock in the open market, or the
availability of shares for sale, could adversely affect the price of our common
stock. Any shares distributed by Nycomed Amersham or Pharmacia will be eligible
for immediate resale in the public market without restrictions by persons other
than our affiliates. Our affiliates would be subject to the restrictions of Rule
144 described above other than the one-year holding period requirement.

We, Nycomed Amersham, Pharmacia and our directors and executive officers
have agreed that, without the prior written consent of Morgan Stanley & Co.
Incorporated on behalf of the underwriters, we will not, during the period
ending 180 days after the date of this prospectus, sell or otherwise dispose of
any shares of our common stock, subject to limited exceptions. Nycomed Amersham
and Pharmacia have also agreed not to exercise or make a request to exercise any
registration right until the end of the 180 day period. See "Underwriters."

An aggregate of shares of our common stock are reserved for issuance
under our stock option plans. We intend to file registration statements on Form
S-8 covering the issuance of shares of our common stock pursuant to our stock
option plans. Accordingly, the shares issued pursuant to our stock option plans
will be freely tradable, subject to the restrictions on resale by affiliates
under Rule 144.

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REGISTRATION RIGHTS AGREEMENT

As part of the shareholders' agreement, we have granted Nycomed Amersham
and Pharmacia registration rights. The demand registration rights provide
Nycomed Amersham and Pharmacia with the right, subject to some conditions and
limitations, to request that we affect a registration of all or a portion of
their shares. The initial demand right may not be exercised until 180 days after
the date of the reorganization. The incidental registration rights provide
Nycomed Amersham and Pharmacia with the right, subject to some exceptions, to
include common stock owned by them in any registration of common stock made by
us for our own account or for the account of other shareholders. We do not
currently have any other registration rights outstanding. See "Relationship With
Nycomed Amersham and Pharmacia."

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MATERIAL UNITED STATES FEDERAL INCOME TAX

CONSEQUENCES TO NON-UNITED STATES STOCKHOLDERS

This is a general summary of certain United States federal income and
estate tax considerations with respect to your acquisition, ownership and
disposition of APBiotech common stock if you are a holder other than:

- a citizen or resident alien individual of the United States;

- a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or of any political subdivision
of the United States;

- an estate, the income of which is subject to United States federal
income taxation regardless of its source;

- a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust; or

- a trust that existed on August 20, 1996 and elected to be treated as a
domestic trust as of that date.

This summary does not address all of the United States federal income and
estate tax considerations that may be relevant to you in light of your
particular circumstances. This summary does not discuss any aspects of state,
local or non-United States taxation. This summary is based on current provisions
of the Internal Revenue Code, Treasury regulations, judicial opinions, published
positions of the Internal Revenue Service, or IRS, and all other applicable
authorities, all of which are subject to change, possibly with retroactive
effect.

WE URGE PROSPECTIVE NON-UNITED STATES INVESTORS TO CONSULT THEIR TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES
INCOME AND OTHER TAX CONSIDERATIONS OF ACQUIRING, HOLDING AND DISPOSING OF YOUR
SHARES OF THE COMMON STOCK.

DIVIDENDS

We do not currently anticipate paying dividends for the foreseeable future.
However, any dividends we do pay to you generally will be subject to United
States withholding tax at a rate of 30%, or a lower rate prescribed by an
applicable income tax treaty, of the gross amount of the dividends unless the
dividends are effectively connected with your conduct of a trade or business
within the United States (and, if certain tax treaties apply, are attributable
to a United States permanent establishment maintained by you) and you file the
appropriate documentation with us. Dividends effectively connected with a United
States trade or business generally will be subject to United States federal
income tax on a net income tax basis in the same manner as generally applied to
United States persons. If you are a corporation, your "effectively connected
earnings and profits," within the meaning of the Internal Revenue Code, subject
to adjustments, may also be subject to the branch profits tax at a rate of 30%,
or a lower rate as may be specified by an applicable income tax treaty. You
should consult any applicable income tax treaties that may provide for a lower
rate of tax or other rules different from those described above. You may be
required to satisfy certification requirements in order to claim treaty benefits
or otherwise claim a reduction of, or exemption from, withholding under these
rules.

SALE OR OTHER DISPOSITION OF THE COMMON STOCK

You generally will not be subject to United States federal income tax on
any gain realized upon the sale or other disposition of your shares of the
common stock unless:

- the gain is effectively connected with the conduct of a trade or
business within the United States, and, if some tax treaties apply, is
attributable to a United States permanent establishment you maintain;

99
<PAGE> 100
- you are an individual, you hold shares of the common stock as a
capital asset, you are present in the United States for 183 days or
more in the taxable year of disposition and you meet other
requirements;

- you are subject to tax pursuant to the provisions of the Internal
Revenue Code regarding the taxation of some U.S. expatriates; or

- we are or have been a "United States real property holding
corporation" for United States federal income tax purposes (which we
do not believe that we are or will become) and you hold or have held,
directly or indirectly, at any time within the shorter of the
five-year period preceding disposition or your holding period for the
shares of the common stock, more than 5% of the common stock.

Gain that is effectively connected with your conduct of a trade or business
within the United States generally will be subject to United States federal
income tax on a net income basis, in the same manner as generally applied to
United States persons (and if you are a corporation, the branch profits tax may
also apply in some circumstances), but you will not be subject to withholding.
If you are described in the second bullet point above, you generally will be
subject to tax at a rate of 30% on the gain realized, although the gain may be
offset by some United States capital losses. You should consult any applicable
income tax treaties that may provide for a lower rate of tax or other rules
different from those described above.

INFORMATION REPORTING AND BACKUP WITHHOLDING

We must report annually to the IRS and to you the amount of dividends we
pay to you, and any tax we withhold. These reporting requirements apply
regardless of whether withholding is reduced by an applicable income tax treaty.
Pursuant to applicable tax treaties or other agreements, this information also
may be made available to the tax authorities in the country in which you are a
resident.

Under current Treasury regulations, United States information reporting
requirements and backup withholding tax at a rate of 31% will generally apply to
dividends paid to you on the common stock at an address inside the United States
and to payments to you of the proceeds of a sale of the common stock by a United
States office of a broker unless you certify, under penalties of perjury, that
you are not a U.S. holder or otherwise establish an exemption. Some holders,
including all corporations, are exempt from backup withholding. Information
reporting (but not backup withholding) generally will also apply to payments of
the proceeds of sales of the common stock by foreign offices of United States
brokers, or foreign brokers with some types of relationships with the United
States, unless the broker has documentary evidence in its records that you are
not a U.S. holder and some other conditions are met, or you otherwise establish
an exemption.

The IRS has issued Treasury regulations generally effective for payments
made after December 31, 2000 that will affect the procedures to be followed by
you in establishing that you are not a U.S. holder for purposes of the backup
withholding and information reporting requirements. Among other things, if you
are not currently required to furnish certification of foreign status, you may
be required to furnish certification of foreign status in the future. You should
consult your tax advisor concerning the effect of these regulations on an
investment in the common stock.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to you can be refunded or credited
against your United States federal income tax liability, if any, if the required
information is timely furnished to the IRS.

ESTATE TAX

Common stock owned or treated as owned by an individual who is not a
citizen or resident (as defined for United States federal estate tax purposes)
of the United States at the time of his or her death will be includible in the
individual's gross estate for United States federal estate tax purposes (unless
an applicable estate tax treaty provides otherwise) and therefore may be subject
to United States federal estate tax.

100
<PAGE> 101
UNDERWRITERS

Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus, the underwriters named below, for
whom Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co., Chase Securities
Inc. and Salomon Smith Barney Inc. are acting as representatives, have severally
agreed to purchase, and we have agreed to sell to them severally, the number of
shares indicated below:
<TABLE>
<CAPTION>

NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Morgan Stanley & Co. Incorporated ..........................
Goldman, Sachs & Co. .......................................
Chase Securities Inc. ......................................
Salomon Smith Barney Inc. ..................................

Total ....................................
</TABLE>

The underwriters are offering the shares of common stock subject to their
acceptance of the shares from us and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters to pay for
and accept delivery of the shares of common stock offered by this prospectus are
subject to the approval of certain legal matters by their counsel and to certain
other conditions. The underwriters are obligated to take and pay for all of the
shares of common stock offered by this prospectus if any such shares are taken.
However, the underwriters are not required to take or pay for the shares covered
by the underwriters' over-allotment option described below.

The underwriters initially propose to offer part of the shares of common
stock directly to the public at the public offering price listed on the cover
page of this prospectus and part to certain dealers at a price that represents a
concession not in excess of $ a share under the public offering price. Any
underwriter may allow, and such dealers may reallow, a concession not in excess
of $ a share to other underwriters or to certain dealers. After the initial
offering of the shares of common stock, the offering price and other selling
terms may from time to time be varied by the representatives.

We have granted to the underwriters an option, exercisable for 30 days from
the date of this prospectus, to purchase up to an aggregate of additional
shares of common stock at the public offering price listed on the cover page of
this prospectus, less underwriting discounts and commissions. The underwriters
may exercise this option solely for the purpose of covering over-allotments, if
any, made in connection with the offering of the shares of common stock offered
by this prospectus. To the extent the option is exercised, each underwriter will
become obligated, subject to certain conditions, to purchase about the same
percentage of the additional shares of common stock as the number listed next to
the underwriter's name in the preceding table bears to the total number of
shares of common stock listed next to the names of all underwriters in the
preceding table. If the underwriters' option is exercised in full, the total
price to the public would be $ , the total underwriters' discounts and
commissions would be $ and total proceeds to us would be $ .

The underwriters have informed us that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
common stock offered by them.

We will apply for quotation of the common stock on the Nasdaq National
Market under the symbol "APBI."

We, our directors, executive officers and existing shareholders have agreed
that, without the prior written consent of Morgan Stanley & Co. Incorporated on
behalf of the underwriters, we will not, during the period ending 180 days after
the date of this prospectus:

- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose
of directly or

101
<PAGE> 102
indirectly, any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock; or

- enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the
common stock;

whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in cash or otherwise. The restrictions
described in this paragraph do not apply to:

- the sale of the shares to the underwriters;

- the issuance by us of shares of common stock upon the exercise of an
option or a warrant or the conversion of a security outstanding on the
date of this prospectus of which the underwriters have been advised in
writing; or

- transactions by any person other than us relating to shares of common
stock or other securities acquired in open market transactions after
the completion of the offering of the shares.

In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may sell more shares
than they are obligated to purchase under the underwriting agreement, creating a
short position. A short sale is "covered" if the short position is no greater
than the number of shares available for purchase by the underwriters under the
over-allotment option. The underwriters can close out a covered short sale by
exercising the over-allotment option or purchasing shares in the open market. In
determining the source of shares to close out a covered short sale, the
underwriters will consider, amount other things, the open market price of shares
compared to the price available under the over-allotment option. The
underwriters may also sell shares in excess of the over-allotment option,
creating a naked short position. The underwriters must close out any naked short
position by purchasing shares in the open market. A naked short position is more
likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the common stock in the open market after
pricing that could adversely affect investors who purchase in the offering. In
addition, to stabilize the price of the common stock, the underwriters may bid
for, and purchase, shares of common stock in the open market. Finally, the
underwriting syndicate may reclaim selling concessions allowed to an underwriter
or a dealer for distributing the common stock in the offering if the syndicate
repurchases previously distributed common stock to cover syndicate short
positions or to stabilize the price of the common stock. Any of these activities
may stabilize or maintain the market price of the common stock above independent
market levels. The underwriters are not required to engage in these activities,
and may end any of these activities at any time.

From time to time, Morgan Stanley & Co. Incorporated has provided, and
continues to provide, investment banking services to Nycomed Amersham and us.

We and the underwriters have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act.

PRICING OF THE OFFERING

Prior to this offering, there has been no public market for the shares of
common stock. The initial public offering price will be determined by
negotiations between us and the representatives of the underwriters. Among the
factors to be considered in determining the initial public offering price will
be our future prospects and our industry in general; sales, earnings and certain
other of our financial operating information in recent periods; and the
price-earnings ratios, price-sales ratios, market prices of securities and
certain financial and operating information of companies engaged in activities
similar to those of ours. The estimated initial public offering price range set
forth on the cover page of this preliminary prospectus is subject to change as a
result of market conditions and other factors.

102
<PAGE> 103
LEGAL MATTERS

The validity of the issuance of the shares of common stock offered hereby
will be passed upon for us by Davis Polk & Wardwell, New York, New York, and for
the underwriters by Shearman & Sterling, New York, New York.

EXPERTS

The financial statements of Amersham Pharmacia Biotech Ltd. as of December
31, 1998 and 1999 and for the nine months ended December 31, 1997 and the years
ended December 31, 1998 and 1999, included in this registration statement and
prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The financial statements of Pharmacia Biotech for the seven months ended
July 31, 1997, included in this registration statement and prospectus, have been
so included in reliance on the report of PricewaterhouseCoopers, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

The balance sheet of APBiotech Inc as of August 31, 2000, included in this
registration statement and prospectus, has been included in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC, Washington, D.C. 20549, a registration
statement on Form S-1 under the Securities Act with respect to the common stock
offered hereby. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules thereto.
Certain items are omitted in accordance with the rules and regulations of the
SEC. For further information with respect to us and our common stock, reference
is made to the registration statement and the exhibits and any schedules filed
therewith. Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete and in each
instance, if such contract or document is filed as an exhibit, reference is made
to the copy of such contract or other document filed as an exhibit to the
registration statement, each statement being qualified in all respects by such
reference. A copy of the registration statement, including the exhibits and
schedules thereto, may be read and copied at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of
the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains an Internet site at http://www.sec.gov, from
which interested persons can electronically access the registration statement,
including the exhibits and any schedules thereto. The registration statement,
including the exhibits and schedules thereto, are also available for reading and
copying at the offices of Nasdaq Operations, 1735 K Street, N.W., Washington,
D.C. 20006.

As a result of the offering, we will become subject to the full
informational requirements of the Securities Exchange Act of 1934, as amended.
We will fulfill our obligations with respect to those requirements by filing
periodic reports and other information with the SEC. We intend to furnish our
shareholders with annual reports containing consolidated financial statements
certified by an independent public accounting firm.

103
<PAGE> 104
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

PAGE
----
<S> <C>
Unaudited Consolidated Financial Statements for Amersham Pharmacia Biotech Ltd:
Consolidated Statements of Operations for the six months ended June 30, 1999 and June 30, 2000 ...... F-2
Consolidated Balance Sheets as of December 31, 1999 and June 30, 2000 ............................... F-3
Consolidated Statements of Cash Flows for the six months ended June 30, 1999 and June 30, 2000 ...... F-4
Notes to Consolidated Financial Statements .......................................................... F-5

Audited Consolidated Financial Statements for Amersham Pharmacia Biotech Ltd:
Report of Independent Accountants ................................................................... F-9
Consolidated Statements of Operations for the nine months ended December 31, 1997 and the years ended
December 31, 1998 and 1999 .......................................................................... F-10
Consolidated Balance Sheets as of December 31, 1998 and 1999 ........................................ F-11
Consolidated Statements of Cash Flows for the nine months ended December 31, 1997 and the years ended
December 31, 1998 and 1999 .......................................................................... F-12
Consolidated Statements of Changes in Stockholders' Equity .......................................... F-13
Notes to Consolidated Financial Statements .......................................................... F-15

Audited Consolidated Financial Statements for Pharmacia Biotech:
Report of Independent Accountants ................................................................... F-41
Consolidated Statements of Operations for the seven months ended July 31, 1997 ...................... F-42
Consolidated Statements of Cash Flows for the seven months ended July 31, 1997 ...................... F-43
Notes to Consolidated Financial Statements .......................................................... F-44

Audited Financial Statements for APBiotech Inc:
Report of Independent Accountants ................................................................... F-50
Balance Sheet as of August 31, 2000 ................................................................. F-51
</TABLE>

F-1
<PAGE> 105
AMERSHAM PHARMACIA BIOTECH LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
<TABLE>
<CAPTION>

SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1999 JUNE 30, 2000
------------- -------------
(IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C>
Net sales ............................................. $ 375.9 $ 449.2
Cost of goods sold .................................... (168.1) (194.1)
---------- ----------
Gross profit .......................................... 207.8 255.1
---------- ----------
Selling, general and administrative expenses .......... (165.5) (186.1)
Purchased in-process research and development ......... -- (3.2)
Research and development expenses ..................... (42.3) (56.8)
Other operating income (expense), net ................. (2.9) 3.1
---------- ----------
Total operating expenses .............................. (210.7) (243.0)
---------- ----------
Operating income (loss) ............................... (2.9) 12.1
Interest income and other income (expense), net ....... 1.3 0.8
Interest expense ...................................... (12.0) (13.8)
---------- ----------
Income (loss) before income taxes and minority
interest ............................................. (13.6) (0.9)
Minority interest, net of tax ......................... (0.2) (0.2)
(Provision) benefit for income taxes .................. 20.7 (4.5)
---------- ----------
Net income (loss) ..................................... $ 6.9 $ (5.6)
---------- ----------
Earnings per share
Basic and diluted ..................................... $ 2.00 $ (10.60)
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-2
<PAGE> 106
AMERSHAM PHARMACIA BIOTECH LTD.

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>

AS OF AS OF
DECEMBER 31, 1999 JUNE 30, 2000
----------------- -------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................................. $ 30.9 $ 27.5
Trade receivables, less allowance of $5.1 in 2000 and $4.9 in 1999 .... 236.7 207.5
Inventories ........................................................... 114.4 125.6
Deferred income taxes ................................................. 40.0 35.0
Other current assets .................................................. 49.6 46.2
---------- ----------
Total current assets .................................................... 471.6 441.8
---------- ----------
Property, plant and equipment, net .................................... 227.8 230.3
Intangible assets, net ................................................ 526.6 493.6
Other non-current assets .............................................. 23.3 43.0
---------- ----------
Total assets ............................................................ $ 1,249.3 $ 1,208.7
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt (including current maturities on long-term debt) ...... $ 397.2 $ 418.3
Accounts payable ...................................................... 62.4 39.6
Accrued liabilities ................................................... 84.9 87.6
Income taxes payable .................................................. 23.1 25.2
Other current liabilities ............................................. 53.0 46.0
---------- ----------
Total current liabilities ............................................... 620.6 616.7
---------- ----------
Long-term debt ........................................................ 13.1 13.6
Deferred income taxes ................................................. 76.6 56.6
Employee benefit obligations .......................................... 60.9 58.9
Other liabilities ..................................................... 10.3 8.2
---------- ----------
Total liabilities ..................................................... 781.5 754.0
---------- ----------

COMMITMENTS AND CONTINGENCIES (NOTE 7)
Redeemable cumulative preferred stock $1.62 par value 67,916,327 shares
issued and outstanding ................................................ 132.5 128.4

STOCKHOLDERS' EQUITY:
Common stock, $1.62 par value 1,000,000 shares authorized and issued .. 1.6 1.6
Additional paid-in capital ............................................ 426.3 448.1
Retained deficit ...................................................... (96.2) (106.8)
Unearned compensation expense ......................................... (2.2) (11.7)
Accumulated other comprehensive income (loss) ......................... 5.8 (4.9)
---------- ----------
Total stockholders' equity .............................................. 335.3 326.3
---------- ----------
Total liabilities and stockholders' equity .............................. $ 1,249.3 $ 1,208.7
========== ==========
</TABLE>

F-3
<PAGE> 107
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-4
<PAGE> 108
AMERSHAM PHARMACIA BIOTECH LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1999 JUNE 30, 2000
------------- -------------
(IN MILLIONS)
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income ............................................................ $ 6.9 $ (5.6)
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization ....................................... 35.9 41.0
Amortization of unearned compensation ............................... 1.4 9.8
Gains on asset disposals ............................................ -- (3.8)
Deferred income taxes ............................................... (8.2) (15.9)
Write-off of purchased in-process research and development .......... -- 3.2
------- -------
36.0 28.7
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Decrease in trade receivables ....................................... 19.5 26.7
(Increase) in inventories ........................................... (22.5) (12.2)
(Decrease) in accounts payable ...................................... (25.6) (22.1)
(Decrease) in accruals and other creditors .......................... (23.8) (3.9)
Increase in other assets and liabilities ............................ 1.5 8.5
------- -------
Net cash provided (used) by operating activities ...................... (14.9) 25.7
------- -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment .......................... (30.9) (25.7)
Acquisition of businesses, net of cash acquired ..................... -- (11.3)
Purchase of investments ............................................. -- (6.9)
Proceeds from asset disposals ....................................... 0.3 10.2
------- -------
Net cash used by investing activities ................................. (30.6) (33.7)
------- -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term debt ......................................... 39.0 23.9
Repayment of long-term debt ......................................... (2.7) (0.2)
Parent company option trust payment ................................. -- (17.4)
------- -------
Net cash provided by financing activities ............................. 36.3 6.3
------- -------
Effect of exchange rates on cash ...................................... (2.5) (1.7)
------- -------
Net change in cash and cash equivalents ............................... (11.7) (3.4)
Cash and cash equivalents at beginning of period ...................... 39.7 30.9
------- -------
Cash and cash equivalents at end of period ............................ $ 28.0 $ 27.5
======= =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-5
<PAGE> 109
AMERSHAM PHARMACIA BIOTECH LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. GENERAL

The accompanying interim consolidated financial statements include all
adjustments (consisting of only normal recurring adjustments) which are, in the
opinion of management, considered necessary for a fair presentation of the
results of Amersham Pharmacia Biotech Ltd. and Subsidiaries ("APB Ltd." or the
"Company") for the periods presented. These financial statements should be read
in conjunction with the consolidated financial statements of the Company as of
and for the year ended December 31, 1999, included elsewhere in this
registration statement. The reported results for the six month period ended June
30, 2000 are not necessarily indicative of the results to be expected for the
full year.

2. BUSINESS ACQUISITION AND STRATEGIC ALLIANCES

BUSINESS ACQUISITION

On February 16, 2000, the Company acquired all of the outstanding stock of
Praelux, Inc., for a purchase price of $8.5 million. Praelux specializes in the
development and manufacture of technology and instruments for cellular assays
and DNA sequencing. Based on a preliminary purchase price allocation, the
Company has recorded a charge for in-process research and development of
approximately $3.2 million in the six month period ended June 2000 and acquired
intangibles and residual goodwill of approximately $5.8 million will be
amortized over an average life of 10 years.

Pro forma information on the results of operations as if the acquisition of
Praelux had occurred as of the beginning of 1999 and 2000 has not been provided
as the impact of Praelux is not material to the Company's results of operations.

STRATEGIC ALLIANCES

In January of 2000 the Company entered into agreements with Gyros AB
("Gyros") under which the Company committed to contribute approximately $6.4
million to Gyros in exchange for a 19.9% interest in Gyros which will be
accounted for by the Company on the equity method. Additionally, the Company
sold certain intellectual property to Gyros for approximately $9.5 million in
cash. At June 30, 2000, approximately $3.1 million of the $6.4 million in
funding to Gyros had been advanced. The gain recognized on the sale of the
intellectual property, which had no book value, was approximately $3.1 million
after reductions due to the Company's future funding obligations and the
recording of the Company's 19.9% share of the in-process research and
development charge recorded by Gyros in connection with the intellectual
property acquired. The remaining $3.3 million due under the funding agreement
has been recorded as a liability in the accompanying financial statements and is
expected to be paid by the end of the first quarter of 2001.

In March 2000, the Company entered into a supply agreement with Analytica
of Branford ("Branford") which required future payments depending on milestones
achieved by Branford. In addition, the Company at its option may acquire a
controlling interest in Branford.

In April 2000 the Company entered into a license agreement with V.I.
Technologies, Inc. which required an initial payment of $1.0 million and future
payments of up to $1.5 million. The $1.0 million was charged to research and
development expense as the technology under license has not reached commercial
viability. In addition, the Company may, at its option, advance additional funds
to V.I. Technologies upon V.I. Technologies request.

F-6
<PAGE> 110
AMERSHAM PHARMACIA BIOTECH LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

3. BUSINESS SEGMENT INFORMATION

The Company manages its business along three principal business segments:
Separations, Drug discovery, and Laboratory products. In addition, the Company
has service and agency businesses which are included in Service, agency and
other segment.

The operations of each segment are evaluated principally based on operating
profit including allocation of corporate expenses, but prior to interest expense
or income taxes. For the six months ended June 30, 1999 and 2000 the analysis of
net sales and operating income by business segment is as follows:
<TABLE>
<CAPTION>

SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1999 JUNE 30, 2000
------------- -------------
(IN MILLIONS)
<S> <C> <C>
NET SALES
Drug discovery .......... $ 70.4 $ 104.4
Separations ............. 136.3 164.9
Laboratory products ..... 131.4 136.9
Service, agency and
other .................. 37.8 43.0
-------- --------
$ 375.9 $ 449.2
======== ========
OPERATING INCOME (LOSS)
Drug discovery .......... $ (38.8) $ (44.8)
Separations ............. 17.6 37.5
Laboratory products ..... 13.9 9.5
Service, agency and
other ................... 4.4 9.9
-------- --------
$ (2.9) $ 12.1
======== ========
</TABLE>

4. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing the net income
(loss) applicable to common stockholders by the weighted average number of
common shares outstanding during the period. Net income (loss) available to
common stockholders consists of net income (loss) reduced by the amount of
dividend accretion on the Company's 8% redeemable cumulative preferred stock.
Diluted earnings per share amounts are calculated by dividing the net income
(loss) applicable to common stockholders by the sum of the weighted average
number of common shares outstanding and dilutive common share equivalents.

The computation of basis and diluted earnings per share for each year were
as follows:
<TABLE>
<CAPTION>

SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1999 JUNE 30, 2000
------------- -------------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Net income ....................................... $ 6.9 $ (5.6)
Preferred stock dividend ......................... $ (4.9) $ (5.0)
------- --------
Net income (loss) available to common
stockholders .................................... $ 2.0 $ (10.6)
------- --------
Weighted average shares outstanding
(in millions) ................................... $ 1.0 $ 1.0
------- --------
</TABLE>

F-7
<PAGE> 111
AMERSHAM PHARMACIA BIOTECH LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1999 JUNE 30, 2000
------------- -------------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>

Basic and diluted earnings per share ............. $ 2.00 $ (10.60)
</TABLE>

The 8% redeemable cumulative preferred stock convertible into the Company's
common stock was not included in the diluted earnings per share calculations for
1999 and 2000 as their effect would be antidilutive.

5. INVENTORIES

Inventories consist of the following:
<TABLE>
<CAPTION>

AS OF AS OF
DECEMBER 31, 1999 JUNE 30, 2000
----------------- -------------
(IN MILLIONS)
<S> <C> <C>
Raw materials and
supplies ................ $ 25.8 $ 38.5
Work in-process .......... 29.2 45.8
Finished Goods ........... 59.4 41.3
-------- --------
$ 114.4 $ 125.6
======== ========
</TABLE>

6. COMPREHENSIVE INCOME

SFAS 130, "Reporting Comprehensive Income," requires foreign currency
translation adjustments and certain other items to be included in other
comprehensive income (loss). Total comprehensive income (loss) amounted to
approximately $1.9 million and $(11.5) million for the six months ended June 30,
1999 and 2000, respectively. The only components of accumulated other
comprehensive loss for the Company are foreign currency translation adjustments.

7. COMMITMENTS AND CONTINGENCIES

The Company is involved in various patent infringement actions with PE
Corporation and its divisions, including those in which the Company is both a
plaintiff and a defendant related to DNA sequencing technologies. In one action
where the Company is a plaintiff, a recent patent claims construction hearing
was ruled in favor of the Company. In a number of consolidated actions, the
Company is both plaintiff and defendant, and a similar claims construction
hearing has been heard and not adjudicated. These cases will not be heard until
2001. Additionally, in May of 2000 PE Biosystems filed a further patent
infringement suit against the Company. The Company is vigorously contesting
these claims. However, it is not possible to predict with certainty the outcome
of this litigation, and while the Company does not believe an adverse result
would have a material effect on the Company's consolidated financial position,
it could be material to the results of operations or cash flows for a fiscal
year.

The Company is also involved in other litigation arising out of the
ordinary course of business, including those relating to product liability and
infringements of intellectual property and validity of patents. Although the
amount of any liability that might arise with respect to any of these matters
cannot be accurately predicted, the resulting liability, if any, will not in the
opinion of the management have a material adverse effect on the consolidated
financial position, results of operations or cash flows of the Company.

In connection with the manufacturing agreement related to the Cardiff site,
Nycomed Amersham has retained any liabilities related to the radioactive
decommissioning of the site which pertain to the period prior to August 4,

F-8
<PAGE> 112
AMERSHAM PHARMACIA BIOTECH LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1997. In the event that the U.K. Nuclear Installations Inspectorate agrees to
grant a nuclear license to the Company and the Cardiff site is transferred to
the Company, or in the event that the Company terminates the manufacturing
agreement related to the Cardiff site, the Company is obligated to reimburse
Nycomed Amersham for radioactive decommissioning and waste disposal costs
related to the period after August 4, 1997.

8. SUBSEQUENT EVENTS

FORMATION OF APBIOTECH INC AND OFFERING OF SHARES

The Company has commenced the process of conducting an initial public
offering of its common shares. APBiotech Inc, a recently formed U.S.
corporation, was created with this planned offering and will become the holding
company for APB Ltd. The number of shares to be sold will represent
approximately 10% of the Company's outstanding common stock subsequent to the
offering. The credit facility with Nycomed Amersham will remain outstanding
subsequent to the offering.

ADDITIONAL CAPITAL CONTRIBUTION AND CONVERSION OF REDEEMABLE CUMULATIVE
PREFERRED STOCK

Nycomed Amersham and Pharmacia Corporation as shareholders of the Company,
have adopted resolutions that, concurrent with the offering of shares discussed
above, will result in the following:

- Nycomed Amersham and Pharmacia have agreed to an additional capital
contribution of approximately pound sterling 100 million, to be
contributed 55% by Nycomed Amersham and 45% by Pharmacia. Nycomed
Amersham and Pharmacia will receive shares of APBiotech Ltd's common
stock in exchange for their contributions.

- Nycomed Amersham and Pharmacia, as holders of the Company's 8%
Redeemable Cumulative Preferred Stock (the "preferred stock"), will
convert all of the Company's outstanding preferred stock of 67,916,327
shares into shares of the Company's common stock. The conversion ratio
will be determined in accordance with the preferred stock's terms by
dividing the dollar value of the preferred shares outstanding,
including accrued dividends, by the price of APBiotech Inc's common
stock to be sold in the Offering.

9. RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 is
effective for the Company for all fiscal quarters and fiscal years beginning
after January 1, 2001. SFAS 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. SFAS 133 is not
expected to have a material impact on the Company's consolidated results of
operations, financial position or cash flows.

F-9
<PAGE> 113
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Amersham Pharmacia Biotech Ltd.:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity and cash flows
present fairly, in all material respects, the financial position of Amersham
Pharmacia Biotech Ltd. and Subsidiaries (the "Company") at December 31, 1999 and
1998, and the results of their operations and their cash flows for the years
ended December 31, 1999 and 1998 and for the nine months ended December 31, 1997
in conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP
------------------------------
Florham Park, New Jersey
September 28, 2000

F-10
<PAGE> 114
AMERSHAM PHARMACIA BIOTECH LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ---------- ----------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)

<S> <C> <C> <C>
Net sales ............................................. $ 374.2 $ 729.4 $ 864.1
Cost of goods sold .................................... (190.7) (318.8) (387.0)
--------- --------- ---------
Gross profit .......................................... 183.5 410.6 477.1
--------- --------- ---------
Selling, general and administrative expenses .......... (169.7) (328.4) (354.1)
Purchased in-process research and development ......... (18.0) -- --
Research and development expenses ..................... (32.8) (67.9) (89.6)
Other operating income (expense), net ................. 0.7 3.7 (1.2)
--------- --------- ---------
Total operating expenses .............................. (219.8) (392.6) (444.9)
--------- --------- ---------
Operating income (loss) ............................... (36.3) 18.0 32.2

Interest income and other income (expense), net ....... 1.6 4.5 3.2
Interest expense ...................................... (3.7) (16.5) (24.1)
--------- --------- ---------
Income (loss) before income taxes and minority interest (38.4) 6.0 11.3
--------- --------- ---------
Minority interest, net of tax ......................... -- (0.7) (0.5)

(Provision) benefit for income taxes .................. 2.3 (15.8) (17.1)
--------- --------- ---------
Net (loss) ............................................ $ (36.1) $ (10.5) $ (6.3)
========= ========= =========

Earnings per share
Basic and diluted ..................................... $ (49.63) $ (19.80) $ (16.20)
========== ========== ==========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-11
<PAGE> 115
AMERSHAM PHARMACIA BIOTECH LTD.

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

AS OF AS OF
DECEMBER 31, 1998 DECEMBER 31, 1999
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................................... $ 39.7 $ 30.9
Trade receivables, less allowances of $4.9 in 1999
and $5.6 in 1998 .................................................. 204.0 236.7
Inventories ......................................................... 89.9 114.4
Deferred income taxes ............................................... 36.0 40.0
Other current assets ................................................ 56.6 49.6
---------- ----------
Total current assets .................................................. 426.2 471.6
---------- ----------
Property, plant and equipment, net .................................. 199.4 227.8
Intangible assets, net .............................................. 576.4 526.6
Other non-current assets ............................................ 24.2 23.3
---------- ----------
Total assets .......................................................... $ 1,226.2 $ 1,249.3
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt (including current maturities on long-term debt) .... $ 352.9 $ 397.2
Accounts payable .................................................... 62.6 62.4
Accrued liabilities ................................................. 104.4 84.9
Income taxes payable ................................................ 14.5 23.1
Other current liabilities ........................................... 53.8 53.0
---------- ----------
Total current liabilities ............................................. 588.2 620.6
---------- ----------
Long-term debt ...................................................... 17.3 13.1
Deferred income taxes ............................................... 84.2 76.6
Employee benefit obligations ........................................ 55.6 60.9
Other liabilities ................................................... 14.2 10.3
---------- ----------
Total liabilities ..................................................... 759.5 781.5
---------- ----------
COMMITMENTS AND CONTINGENCIES (NOTE 19)

Redeemable cumulative preferred stock $1.62 par value 67,916,327 shares
issued and outstanding .............................................. 125.7 132.5
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $1.62 par value 1,000,000 shares authorized and
issued ............................................................ 1.6 1.6
Additional paid-in capital .......................................... 413.3 426.3
Retained deficit .................................................... (80.0) (96.2)
Unearned compensation expense ....................................... (2.6) (2.2)
Accumulated other comprehensive income .............................. 8.7 5.8
---------- ----------
Total stockholders' equity ............................................ 341.0 335.3
---------- ----------
Total liabilities and stockholders' equity ............................ $ 1,226.2 $ 1,249.3
========== ==========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-12
<PAGE> 116
AMERSHAM PHARMACIA BIOTECH LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ----------- ------------
(IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) .................................................. $ (36.1) $ (10.5) $ (6.3)
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization ............................. 25.9 61.8 77.1
Amortization of unearned compensation ..................... 4.2 2.0 0.9
Loss on asset disposals ................................... 0.2 8.1 1.0
Deferred income taxes ..................................... (21.6) (6.8) (4.1)
Write-off of purchased in-process research and
development ............................................. 18.0 -- --
------- -------- -------
(9.4) 54.6 68.6
CHANGES IN OPERATING ASSETS AND LIABILITIES:
(Increase) in trade receivables ........................... (15.6) (55.1) (30.8)
(Increase) decrease in inventories ........................ 23.2 12.2 (24.8)
Increase in accounts payable .............................. 14.3 22.9 --
(Decrease) increase in accruals and other creditors ....... (13.8) 13.8 (24.5)
Increase (decrease) in income taxes payable ............... 3.3 (1.4) 8.2
(Decrease) increase in other assets and liabilities ....... 26.1 (14.8) 17.6
------- -------- -------
Net cash provided by operating activities ................... 28.1 32.2 14.3
------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ................ (14.1) (48.8) (64.4)
Acquisition of businesses, net of cash acquired ........... -- (184.3) --
Purchase of investments ................................... -- -- (3.9)
Proceeds from asset disposals ............................. -- 1.0 0.6
------- -------- -------
Net cash used by investing activities ....................... (14.1) (232.1) (67.7)
------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term debt ............................... 35.9 212.1 51.4
Repayment of long-term debt ............................... (0.2) (0.3) (2.8)
Dividends to Nycomed Amersham ............................. (20.2) -- --
------- -------- -------
Net cash provided by financing activities ................... 15.5 211.8 48.6
------- -------- -------
Effect of exchange rates on cash ............................ (0.8) (3.0) (4.0)
------- -------- -------
Net change in cash and cash equivalents ..................... 28.7 8.9 (8.8)
Cash and cash equivalents at beginning of year .............. 2.1 30.8 39.7
------- -------- -------
Cash and cash equivalents at end of year .................... $ 30.8 $ 39.7 $ 30.9
======= ======== =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-13
<PAGE> 117
AMERSHAM PHARMACIA BIOTECH LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

COMMON ADDITIONAL UNEARNED RETAINED ACCUMULATED TOTAL
STOCK PAID-IN COMPENSATION EARNINGS COMPREHENSIVE STOCKHOLDERS'
CAPITAL EXPENSE (DEFICIT) INCOME (LOSS) EQUITY
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE APRIL 1, 1997 ........... $ 0.9 $ 95.8 $ (1.0) $ 54.4 $ 15.3 $165.4
Assets returned to Nycomed
Amersham through dividend ..... -- -- -- (69.1) -- (69.1)
Conversion of Nycomed Amersham
investment into debt
securities .................... -- (93.7) -- (5.8) -- (99.5)

Issuance of common stock in
connection with acquisition of
Pharmacia Biotech ............. 0.7 399.6 -- -- -- 400.3
Capital contribution - Services
provided by Nycomed Amersham .. -- 1.3 -- -- -- 1.3
Unearned compensation expense ... -- 5.8 (5.8) -- -- --
Net (loss) ...................... -- -- -- (36.1) -- (36.1)
Amortization of unearned
compensation expense .......... -- -- 4.2 -- -- 4.2
Accretion of preferred stock
dividend ...................... -- -- -- (3.6) -- (3.6)
Currency Translation adjustment . -- -- -- -- 2.0 2.0
Unrealised gain on investments .. -- -- -- -- 1.4 1.4
------
Total comprehensive loss ........ -- -- -- -- -- (32.1)
------ ------ ------ ------ ------ ------
BALANCE DECEMBER 31, 1997 ....... 1.6 408.8 (2.6) (60.2) 18.7 366.3

Capital contribution - Services
provided by Nycomed Amersham .. -- 2.5 -- -- -- 2.5
Unearned compensation expense ... -- 2.0 (2.0) -- -- --
Net (loss) ...................... -- -- -- (10.5) -- (10.5)
Amortization of unearned
compensation expense .......... -- -- 2.0 -- -- 2.0
Accretion of preferred stock
dividend ...................... -- -- -- (9.3) -- (9.3)
Currency Translation
adjustment .................... -- -- -- -- (0.7) (0.7)
Unrealised loss on investments .. -- -- -- -- (9.3) (9.3)
-------
Total comprehensive loss ........ -- -- -- -- -- (27.8)
------ ------ ------ ------ ------ ------
BALANCE DECEMBER 31, 1998 ....... 1.6 413.3 (2.6) (80.0) 8.7 341.0
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-14
<PAGE> 118
AMERSHAM PHARMACIA BIOTECH LTD.

COMMON ADDITIONAL UNEARNED RETAINED ACCUMULATED TOTAL
STOCK PAID-IN COMPENSATION EARNINGS COMPREHENSIVE STOCKHOLDERS'
CAPITAL EXPENSE (DEFICIT) INCOME (LOSS) EQUITY
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital contribution - net debt
settlement related to Pharmacia
Biotech acquisition ........... -- 8.7 -- -- -- 8.7

Capital contribution - Services
provided by Nycomed Amersham .... -- 3.8 -- -- -- 3.8

Unearned compensation expense ... -- 0.5 (0.5) -- -- --
Net (loss) ...................... -- -- -- (6.3) -- (6.3)
Amortization of unearned
compensation expense .......... -- -- 0.9 -- -- 0.9
Accretion of preferred stock
dividend ...................... -- -- -- (9.9) -- (9.9)
Currency Translation
adjustment .................... -- -- -- -- (2.9) (2.9)
------
Total comprehensive loss ........ -- -- -- -- -- (18.2)
------ ------ ------ ------ ------ ------
BALANCE DECEMBER 31, 1999 ....... $ 1.6 $426.3 $ (2.2) $(96.2) $ 5.8 $335.3
====== ====== ====== ====== ====== ======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-15
<PAGE> 119
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY

Amersham Pharmacia Biotech Ltd. and Subsidiaries ("APB Ltd." or the
"Company") is a leading global provider of biotechnology systems, products and
services for research into genes and proteins, the discovery and development of
drugs and the manufacture of drugs based on biological molecules, also known as
biopharmaceuticals.

The Company is owned 55% by Nycomed Amersham plc ("Nycomed Amersham") and
45% by Pharmacia Corporation, and is a consolidated subsidiary of Nycomed
Amersham.

The Company is organized on a global basis into three principal business
segments. The Drug discovery segment provides high throughput systems to improve
the effectiveness of pharmaceutical research and development and the speed to
market of drugs. The Separations segment provides systems for the purification
and production of biopharmaceuticals on a large scale and for separating
proteins at a laboratory scale. The Laboratory products segment provides tools
and technical knowledge for the purification, detection and analysis of
biological molecules by life science researchers.

The Company also has a regional organization structure consisting of five
major markets - North America, Europe, Japan, Asia Pacific, and Rest of the
World. The regional organization structure permits the business segments to
share activities in service and sales and marketing. They also share research
and development, manufacturing and distribution, worldwide. See Note 4 for
Segment, Geographic and Customer information.

2. BASIS OF PREPARATION

Prior to August 5, 1997, the Company operated as Amersham Life Science
("ALS"), a fully integrated division of Nycomed Amersham, and as such did not
prepare separate financial statements in accordance with Generally Accepted
Accounting Principles in the normal course of operations. On August 5, 1997, ALS
was established as a separate legal entity in the form of APB Ltd, and acquired
the Pharmacia Biotech ("PB") business from Pharmacia Corporation (see Note 6).
At this time the Company also changed its fiscal year end from March 31 to
December 31, and accordingly the consolidated statements of operations and cash
flows for 1997 are for the nine month period from April 1, 1997 to December 31,
1997.

The results of operations of ALS for the period from April 1, 1997 to
August 5, 1997, that are included in the Company's results for the nine months
ended December 31, 1997, have been derived by extracting the assets,
liabilities, revenues, and expenses of ALS from the consolidated assets,
liabilities, revenues and expenses of Nycomed Amersham. The accompanying
financial statements reflect the revenues and expenses directly attributable to
ALS as well as allocations deemed reasonable by management to present the
results of operations and cash flows of ALS on a stand-alone basis. The
allocation methodologies for this period have been described within the
respective footnotes and management considers the allocations to be reasonable.
However, the results of operations and cash flows of ALS from April 1, 1997 to
August 5, 1997 may differ from those that would have been achieved had ALS
operated autonomously or as an entity independent of Nycomed Amersham.

Subsequent to August 5, 1997, the Company conducted operations principally
as a group of separate legal entities around the world. In certain
jurisdictions, however, assets, liabilities, and related revenues and expenses
remained with the respective Nycomed Amersham legal entity. In these instances,
agreements were entered into with the applicable Nycomed Amersham legal entity
to transfer the financial benefits and risks associated with these operations
from Nycomed Amersham to the Company. (see Note 22).

Nycomed Amersham continues to provide certain support services to the Company
and to engage in transactions with the Company (see Note 23).

F-16
<PAGE> 120
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

All significant intercompany accounts and transactions between the Company
and its subsidiaries have been eliminated.

Revenue Recognition.

The Company recognizes revenue principally on four types of transactions -
sales of consumable products, sales of equipment, agreements which provide
access to or license of certain of the Company's proprietary technology and
know-how, and contracts for ongoing service and support of equipment sold to
customers. Revenues are recorded net of any estimated provisions for returns and
allowances and other price adjustments.

Revenue on sales of equipment in the United States and on sales of
consumable products in all markets is recognized upon transfer of title and risk
of loss to the customer, generally upon payment in full by the customer for
equipment in the United States and upon delivery of consumable products in all
markets.

In markets outside of the United States, sales of equipment are made with a
reservation of title until payment in full by the customer for the equipment.
For these sales, revenue is recognized upon delivery of the product and transfer
of risk of loss to the customer, as the reservation of title is solely for
credit protection purposes.

Revenues earned under agreements which provide access to or license the
Company's proprietary technology and know-how are recognized over the term of
the respective agreement.

Revenues earned under contracts for ongoing service are recognized pro rata
over the term of the service agreements.

The Company has adopted Securities and Exchange Commission Staff Accounting
Bulletin 101 ("SAB 101"), "Revenue Recognition in Financial Statements," for all
periods presented.

Use of Estimates

The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Research & Development Costs

Research and development costs are expensed as incurred.

Income Taxes

The Company follows Statement of Financial Accounting Standards No. 109
("SFAS 109"), "Accounting for Income Taxes." Under the asset and liability
method of SFAS 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and net operating loss and credit carry forward available
for tax purposes. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized.

F-17
<PAGE> 121
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Computation of Earnings Per Share

Basic earnings per share amounts are based upon the weighted average number
of common shares outstanding. Diluted earnings per share amounts reflect the
dilutive effect of convertible preferred stock when appropriate.

Cash & Cash Equivalents

The Company considers all highly liquid investments that have an original
maturity of three months or less at the time of purchase to be cash or cash
equivalents.

Inventory Valuation

Inventories are valued at the lower of cost or market. Cost is determined
on a first in, first out basis based on a standard costing system. Such costs
include raw materials, direct labor, and manufacturing overhead.

Property, Plant & Equipment

Items capitalized as property, plant and equipment are recorded at cost.
Expenditures for additions and improvements to existing facilities are
capitalized and expenditures for repairs and maintenance are expensed as
incurred. When assets are sold or retired, their cost and related accumulated
depreciation are removed from the respective accounts, and any gain or loss is
included in income.

Depreciation is computed using the straight-line method of depreciation
based on the estimated useful life of the assets, which follow:
<TABLE>
<S> <C>
Building 40
Plant, machinery & equipment 10-20
Furniture & fixtures 8-12
</TABLE>

Intangible Assets

Intangible assets represents the excess of cost of acquired businesses over
the underlying fair value of the tangible net assets acquired and the cost of
patents, trademarks, and know-how. Intangible assets are amortized on a
straight-line basis over their estimated period of benefit ranging from 5 to 20
years. The Company continually reviews its intangible assets to evaluate whether
events or changes have occurred that would suggest an impairment of carrying
value. An impairment would be recognized when expected future cash flows are
lower than the carrying value.

Long-Lived Assets

The Company follows Statement of Financial Accounting Standards No. 121
(SFAS 121), "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed of," which requires impairment losses to be recorded on
long-lived assets used in operations when indications of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. The amount of impairment loss recorded is
based upon discounted future cash flows estimated to be generated by those
assets.

Foreign Currency Translation and Transactions

The Company treats the local currencies of its international operations as
their respective functional currencies. The assets and liabilities of the
Company's foreign subsidiaries are translated from their respective functional
currencies into U.S. Dollars at exchange rates in effect at the balance sheet
date. Income statement and cash flow

F-18
<PAGE> 122
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amounts are translated using average rates in effect during the year. Foreign
currency transaction gains and losses are included in income. Foreign currency
translation adjustments are included in accumulated other comprehensive income
(loss) as a separate component of stockholders' equity.

Derivative Financial Instruments

The Company operates internationally, giving rise to exposure to market
risks from changes in foreign exchange rates. Derivative financial instruments
are entered into with Nycomed Amersham by the Company to reduce those risks.
Forward exchange contracts and other derivatives are marked to market, with
gains and losses included in operating income.

Stock Options

As a related entity of Nycomed Amersham, certain employees of the Company
have been granted options to purchase common stock of Nycomed Amersham. The
Company follows the provisions of Statement of Financial Accounting Standards
No. 123 (SFAS 123), "Accounting for Stock-Based Compensation." As permitted
under this standard, the Company has elected to follow Accounting Principles
Board Opinion No. 25, "Accounting For Stock Issued to Employees" (APB 25) in
accounting for its stock option and other stock-based employee awards. Pro forma
information regarding net income and earnings per share, as calculated under the
provisions of SFAS 123, are disclosed in Note 18.

Comprehensive Income

SFAS 130, "Reporting Comprehensive Income," requires foreign currency
translation adjustments and certain other items, which were reported separately
in stockholders' equity to be included in other accumulated comprehensive income
(loss). The only components of other comprehensive income (loss) for the Company
are foreign currency translation adjustments, and unrealized gains (losses) on
available-for-sale securities.

Segment Information

SFAS 131, "Disclosures about Segments of an Enterprise and Related
Information" requires segment information to be prepared using the "management"
approach. The "management" approach is based on the method that management
organizes the segments within the Company for making operating decisions and
assessing performance. SFAS 131 also requires disclosures about products and
services, geographic areas, and major customers. See Note 4 for Segment,
Geographic and Customer information.

Advertising Costs

Advertising costs are expensed as incurred.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
133, "Accounting for Derivative Instruments and Hedging Activities". SFAS 133 is
effective for the Company for all fiscal quarters and fiscal years beginning
after January 1, 2001. SFAS 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. SFAS 133 is not
expected to have a material impact on the Company's consolidated results of
operations, financial position or cash flows.

F-19
<PAGE> 123
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. SEGMENT, GEOGRAPHIC AND CUSTOMER INFORMATION

Business Segments

The Company manages its business along three principal business segments:
Drug discovery, Separations, and Laboratory products. In addition to these
principal segments, the Company has Service and Agency businesses which are
included in the Service, agency and other segment.

The Drug discovery business provides high throughput systems to improve the
effectiveness of pharmaceutical research and the development and speed to market
for drugs. Principal products in this business are the MegaBACE and LEADseeker
systems.

The Separations business provides systems for the purification and
production of biopharmaceuticals on a large scale and for separating proteins at
a laboratory scale. Products in this business include Sepharose, a leading brand
of separation media.

The Laboratory products business provides tools and technical knowledge for
the purification, detection, and analysis of biological molecules by life
science researchers. The Company's broad range of products include low
throughput sequencing systems and reagents, scanning and electrophoresis
systems, molecular biology systems, reagents for protein analysis and
radiochemicals.

The Company maintains a Service business which is responsible for the
installation, where appropriate, of instruments and systems which are sold by
the three principal businesses and provides servicing on the instruments and
systems during the warranty period. The cost of these services is generally not
recharged to the businesses. The Service business also generates income from
contracts with customers to provide technical support for instruments and
systems as well as scientific support to assist the customer in maximizing the
effectiveness of the instruments and systems in research. The Company sells
certain products, under agency agreements which complement its existing product
range.

Due to their relative sizes the Service and Agency businesses have been
aggregated, with income from royalty agreements and charges to customers for
product delivery (both of which are not attributed to the principal businesses
for management purposes) in the Service, agency and other segment.

The Company manages the business principally based on accountable operating
profit. The businesses are responsible for management of net sales across all
geographic regions and for operating costs that are directly controllable by the
business. However, a significant portion of the Company's total operating costs
relate to the sales organization and central support services covering finance,
information technology, and other administrative services. These costs are
managed principally by region: however, these costs are allocated to the
businesses in measuring operating profit of each business. The businesses are
not allocated costs below operating profit, such as interest and income taxes,
and as such the information below does not include these costs.

As certain of the businesses share production, research, and administrative
facilities around the world, the net assets of the Company are managed
regionally, principally by the relevant local operating subsidiary. As the
regions and local subsidiaries have responsibility for all businesses, it is not
practicable to report, and the Company does not manage its operations using
identifiable assets or capital expenditures by business segment.

Prior to January 2000, the Company did not operate, manage its operations
or accumulate financial information based on the business segmentation as
described above. As such, the results of operations for the businesses for 1997,
1998, and 1999 have been presented using management's best estimates of the
allocation of costs to the businesses in those years. Management considers these
allocations to be reasonable. However, the reported results of operations of the
businesses may differ from those that may have been achieved had the Company
managed the businesses in this manner in 1997, 1998, and 1999.

F-20
<PAGE> 124
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The analysis of net sales, operating income (loss), and depreciation and
amortization by business segment is as follows:
<TABLE>
<CAPTION>

NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------ --------------
(IN MILLIONS)
<S> <C> <C> <C>
NET SALES
Drug discovery .............. $ 63.8 $ 123.7 $ 194.4
Separations ................. 106.8 263.8 294.4
Laboratory products ......... 180.1 277.2 277.0
Service, agency and other ... 23.5 64.7 98.3
-------- -------- --------
$ 374.2 $ 729.4 $ 864.1
======== ======== ========
OPERATING INCOME (LOSS) (a)
Drug discovery .............. $ (10.5) $ (53.4) $ (53.3)
Separations ................. (11.3) 38.8 51.5
Laboratory products ......... (21.7) 18.0 23.4
Service, agency and other ... 7.2 14.6 10.6
-------- -------- --------
$ (36.3) $ 18.0 $ 32.2
======== ======== ========
DEPRECIATION AND AMORTIZATION
Drug discovery .............. $ 3.3 $ 20.8 $ 29.8
Separations ................. 10.9 20.9 24.0
Laboratory products ......... 10.7 17.4 21.4
Service, agency and other ... 1.0 2.7 1.9
-------- -------- --------
$ 25.9 $ 61.8 $ 77.1
======== ======== ========
</TABLE>

----------------

(a) Operating income includes non-recurring charges related to the acquisition
of Molecular Dynamics of $7.0 million in 1998 and the acquisition of
Pharmacia Biotech of $59.7 million in 1997. The segments impacted are as
follows:
<TABLE>
<CAPTION>

YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1998
------------- ------------
(IN MILLIONS)
<S> <C> <C>
Drug discovery .......... $ 6.4 $ 7.0
Separations ............. 28.1 --
Laboratory products ..... 25.2 --
Service, agency and
other .................. -- --
------- ------
$ 59.7 $ 7.0
======= ======
</TABLE>

Geographic Information

On a geographic basis, the Company manages its business in five principal
markets: North America, Europe, Japan, Asia Pacific and Rest of the World.

F-21
<PAGE> 125
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A geographic analysis of net sales by country of origin and long-lived
assets by geographic region is set out below:
<TABLE>
<CAPTION>

NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------- --------------
(IN MILLIONS)
<S> <C> <C> <C>
NET SALES
United States .......... $ 143.7 $ 331.0 $ 427.6
Europe ................. 198.5 477.5 556.9
Japan .................. 48.7 115.4 151.6
Asia Pacific ........... 32.8 35.2 43.6
Rest of the World ...... 3.4 20.1 22.0
-------- ---------- ----------
427.1 979.2 1,201.7
Less inter-segment
sales ................ (52.9) (249.8) (337.6)
-------- ---------- ----------
$ 374.2 $ 729.4 $ 864.1
======== ========== ==========
</TABLE>

AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------- -------------
(IN MILLIONS)
<S> <C> <C>
LONG-LIVED ASSETS
United States ... $ 592.7 $ 557.6
Europe .......... 178.3 178.1
Japan ........... 8.0 8.6
Asia Pacific .... 1.7 1.9
Rest of the
World ......... 0.7 1.0
-------- --------
$ 781.4 $ 747.2
======== ========
</TABLE>

Customer Information

The Company has a large and diverse customer base. No single customer
accounted for more than 10% of net sales during 1997, 1998, and 1999.

5. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net (loss)
applicable to common stockholders by the weighted average number of common
shares outstanding during the period. Net (loss) available to common
stockholders consists of net (loss) reduced by the amount of dividend accretion
on the Company's 8% redeemable cumulative preferred stock. Diluted earnings per
share is calculated by dividing the net (loss) applicable to common stockholders
by the sum of the weighted average number of common shares outstanding and
dilutive common share equivalents.

F-22
<PAGE> 126
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The computation of basic and diluted earnings per share for each year is as
follows:
<TABLE>
<CAPTION>
NINE YEAR ENDED YEAR ENDED
MONTHS ENDED DECEMBER 31, DECEMBER 31,
DECEMBER 31, 1997 1998 1999
----------------- ------------- ------------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net (loss) ...................................... $ (36.1) $ (10.5) $ (6.3)
Preferred stock dividend ........................ (3.6) (9.3) (9.9)
--------- --------- ---------
Net (loss) available to common stockholders ..... (39.7) (19.8) (16.2)
--------- --------- ---------
Weighted average shares outstanding
(in millions) ................................. 0.8 1.0 1.0
--------- --------- ---------
Basic and diluted earnings per share ............ $ (49.63) $ (19.80) $ (16.20)
========= ========= =========
</TABLE>

The 8% redeemable cumulative preferred stock convertible into the Company's
common stock was not included in the diluted earnings per share calculations for
1997, 1998 and 1999 as their effect would be antidilutive.

6. ACQUISITIONS

Pharmacia Biotech

On August 5, 1997, the Company acquired all of the capital stock of
Pharmacia Biotech AB and its subsidiaries (collectively "PB") from Pharmacia
Corporation for a total purchase price of approximately $450.3 million. PB is an
international provider of biotechnology systems, products and services for
research into genes and proteins and the manufacture of drugs based on
biological molecules, also known as biopharmaceuticals. PB is headquartered in
Sweden with principal operations in the United States, Sweden, Europe, and
Japan. The purchase price was financed by the Company through the issuance of
450,000 shares of Class B common stock and approximately 30,600,000 shares of
preferred stock to Pharmacia Corporation, giving Pharmacia Corporation a 45%
ownership interest in the Company.

The acquisition was accounted for under the purchase method of accounting
and accordingly the results of PB have been included in the Company's financial
statements beginning on August 5, 1997. The acquired identifiable intangibles of
$22.8 million are being amortized on a straight-line basis over periods from
7-10 years and the residual goodwill of approximately $302.7 million is being
amortized on a straight-line basis over 20 years. Non-recurring charges of $27.4
million and $18.0 million were recorded to cost of goods sold for an inventory
adjustment to fair value and to in-process research and development,
respectively, related to the acquisition.

Additionally, concurrent with the acquisition the Company announced an
integration plan which resulted in accruals of $27.4 million being recorded as
liabilities in the purchase price allocation and non-recurring charges of $17.1
million, $40.7 million, and $19.8 million being recorded in 1997, 1998 and 1999
respectively.

The terms of the acquisition of PB also provided for a settlement payment
related to the amount of debt included in the PB acquisition relative to the
Company's existing indebtedness. The resolution of this settlement in 1999
resulted in a payment from Nycomed Amersham to the Company of approximately $8.7
million, which has been treated as a capital contribution in the accompanying
financial statements.

MOLECULAR DYNAMICS INC.

On September 11, 1998, the Company acquired the remaining 91% of the
outstanding capital stock of Molecular Dynamics Inc. ("MDI") that it did not
previously own. MDI is a worldwide manufacturer and marketer of principally Drug
discovery products, with headquarters and manufacturing operations in the United
States. The Company's total investment of $204.7 million consisted of $192.1
million for the 91% interest, $6.8 million cost of

F-23
<PAGE> 127
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the previously existing investment, and $5.8 million of direct acquisition
costs. The acquisition was financed principally through borrowings from the
Company's parent, Nycomed Amersham.

The acquisition was accounted for under the purchase method of accounting
and accordingly the results of MDI have been included in the Company's financial
statements beginning on September 11, 1998.

The acquired identifiable intangibles of $120.0 million are being amortized
on a straight-line basis over 10 years and the residual goodwill of
approximately $98.6 million is being amortized on a straight-line basis over 15
years. In connection with the acquisition a non-recurring charge of $7.0 million
for an inventory write-up to fair value was recorded in cost of goods sold in
1998.

Subsequent to the acquisition the Company announced certain reorganization
actions which resulted in charges of $6.5 million in 1998 and $10.0 million in
1999.

PRO FORMA INFORMATION (UNAUDITED)

The following unaudited pro forma information on results of operations for
1997 assumes the purchases of the PB and MDI businesses as if the companies had
been combined at the beginning of 1997. As the Company's reported results for
1998 include a full year of PB results, pro forma information on results of
operations for 1998 assumes the purchase of MDI as if the companies had been
combined at the beginning of 1998.
<TABLE>
<CAPTION>

PRO FORMA PRO FORMA
NINE MONTHS ENDED YEAR ENDED
DECEMBER 31, 1997(a) DECEMBER 31, 1998(b)
-------------------- --------------------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Revenue .................... $ 547.5 $ 768.5
Net income ................. $ (15.0) $ (18.3)
Basic and diluted EPS ...... $(23.90) $(27.60)
</TABLE>

--------------

a) Excludes non-recurring charges related to the PB acquisition of $59.7
million consisting of in-process research and development ($18.0 million),
the write-off of the fair value adjustment to inventory ($27.4 million),
and integration costs ($14.3 million).

b) Excludes non-recurring charges related to the MDI acquisition of $7.0
million consisting of the write-off of the fair value adjustment to
inventory.

These unaudited pro forma results have been prepared for comparative
purposes only and include certain adjustments, such as additional amortization
expense as a result of acquired intangibles and goodwill and increased interest
expense on acquisition debt. They do not purport to be indicative of the results
of operations that actually would have resulted had the acquisitions occurred at
the beginning of each respective period, or of future results of operations of
the consolidated entities.

7. INTEGRATION COSTS

In connection with the acquisition of PB in August 1997, the Board of
Directors of the Company approved a restructuring plan to integrate the ALS and
PB businesses. The principal elements of the plan were:

- To consolidate U.S. manufacturing and research at a single site in
Piscataway, New Jersey following the divestiture of manufacturing
sites Milwaukee and Cleveland;

- To create a single global sales organization with a regional structure
focusing on the North America, Europe, Japan, Asia Pacific and Rest of
the World; and

F-24
<PAGE> 128
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- To unify the management and administrative functions to support the
two businesses.

The actions related to the ALS business amounted to $14.3 million and were
charged to selling, general, and administrative expense in 1997 while the
actions focused on the PB business amounted to $27.4 million and were accrued
for in the purchase price allocation.

ALS Related Charges

Integration costs related to the ALS business consisted primarily of the
termination of 168 employees, principally at the Cleveland facility and in the
sales and administrative support areas, the termination of certain contractual
obligations, and the write-down of certain non-production related assets which
would no longer be utilized in the business. Other charges primarily related to
the termination of contractual obligations and the remediation of facilities no
longer to be utilized.

Substantially all restructuring activities were completed by the end of
1998, with the exception of certain severance agreements with termination
payments extending into 2000. Additional charges in 1999 were recorded as
management determined that the accrual for certain employees' termination costs
made in 1997 would not be adequate. The remaining accrual for severance costs
relates to one individual plus amounts due under the continuous payment option
for staff terminated prior to December 31, 1999.

The following table summarizes the Company's accruals for restructuring
costs associated with ALS operations:
<TABLE>
<CAPTION>

EMPLOYEE
TERMINATION FIXED ASSET
COSTS WRITE-OFFS OTHER TOTAL
----------- ----------- -------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1997 Charge .................. $12.1 $ 1.4 $ 0.8 $14.3
Utilized ..................... (1.8) (1.4) (0.8) (4.0)
----- ----- ----- -----
Balance at December 31, 1997.. 10.3 -- -- 10.3
Utilized ..................... (9.6) -- -- (9.6)
----- ----- ----- -----
Balance at December 31, 1998.. 0.7 -- -- 0.7
Charges ...................... 1.3 -- -- 1.3
Utilized ..................... (1.3) -- -- (1.3)
----- ----- ----- -----
Balance at December 31, 1999.. $ 0.7 $ -- $ -- $ 0.7
===== ===== ===== =====
</TABLE>

Management expects all remaining severance will be paid in 2000.

PB Related Accruals

Integration costs related to the PB business consisted principally of:

- The termination of 193 individuals, including skilled workers at the
Milwaukee facilities, and research scientists and administrative
support personnel at the research and development and sales support
facilities in New Jersey.

- The termination of contractual obligations, including equipment
leases, associated with the closure or sale of those facilities and
the consolidation of the research and development and sales support
facilities.

- The write-down of certain fixed assets no longer to be utilized as a
result of the consolidation of the research and development and sales
support facilities.

F-25
<PAGE> 129
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Substantially all actions were completed within one year of the acquisition
of PB, with the exception of certain severance agreements with payments
extending into 2000 and the payment of termination fees in 1999. In 1999,
management determined certain recorded employee termination reserves were in
excess of what was required for ongoing obligations, and as such the excess
reserve was released, reducing goodwill from the PB acquisition. The remaining
accrual for severance costs relates to five individuals, plus amounts due under
the continuous payment option to staff terminated prior to December 31, 1999.

The following table summarizes the Company's accruals for integration costs
associated with the PB operations:
<TABLE>
<CAPTION>

EMPLOYEE
TERMINATION CONTRACTUAL FIXED ASSET
COSTS OBLIGATIONS WRITE-DOWNS OTHER TOTAL
----------- ----------- ----------- ----- -----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
1997 charges ................. $21.0 $ 4.3 $ 1.0 $ 1.1 $27.4
Utilized ..................... (2.0) -- (1.0) (0.9) (3.9)
----- ----- ----- ----- -----
Balance at December 31, 1997.. 19.0 4.3 -- 0.2 23.5
Utilized ..................... (7.5) (3.3) -- (0.2) (11.0)
----- ----- ----- ----- -----
Balance at 31 December 1998... 11.5 1.0 -- -- 12.5
Utilized ..................... (7.8) (1.0) -- -- (8.8)
Released against goodwill .... (0.6) -- -- -- (0.6)
----- ----- ----- ----- -----
Balance at 31 December 1999... $ 3.1 $ -- $ -- $ -- $ 3.1
===== ===== ===== ===== =====
</TABLE>

Management expects all remaining severance will be paid in 2000.

Other Charges

In addition to the charges recorded at the time of the PB acquisition, the
Company incurred charges in 1997, 1998, and 1999 which did not qualify for
accrual at the time of announcement of the plan. These costs consisted
principally of professional and consulting fees, workforce relocation and
consolidation costs, and amounted to $2.8 million, $29.9 million, and $18.0
million in 1997, 1998, and 1999, respectively, and were charged to selling,
general and administrative expenses in the accompanying statements of
operations.

Termination of shared services with Nycomed Amersham

Additionally, as a result of the PB acquisition the Company determined that
certain services provided by Nycomed Amersham would no longer be required, and
entered into negotiation with Nycomed Amersham to terminate those services. Fees
related to the termination of these service arrangements, determined in
accordance with the terms of the Company's General Services Agreement, amounted
to $10.8 million in 1998 and $1.8 million in 1999 and were charged to selling,
general and administrative expenses in the accompanying statements of income.
The Company may incur additional charges if any remaining shared services
agreements are terminated in the future.

8. INCOME TAXES

The provision (benefit) for income taxes consisted of:
<TABLE>
<CAPTION>

NINE
MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------- ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
Current tax provision
</TABLE>

F-26
<PAGE> 130
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
NINE
MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------- ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
U.S. Federal .......................... $11.1 $ 5.0 $ 1.3
State and local ....................... 1.0 1.3 0.5
Non-U.S ............................... 7.4 16.4 19.1
----- ----- -----
Total current tax provision ............. 19.5 22.7 20.9
----- ----- -----
Deferred tax provision (benefit)
U.S. Federal .......................... (18.2) (8.6) (6.1)
State and local ....................... (2.5) (1.0) (0.7)
Non-U.S ............................... (1.1) 2.7 3.0
----- ----- -----
Total deferred tax provision (benefit)... (21.8) (6.9) (3.8)
----- ----- -----
Provision (benefit) for income taxes .... $(2.3) $15.8 $17.1
----- ----- -----
</TABLE>

The following table summarizes the reconciliation of the U.S. Federal
statutory tax to the Company's tax provision (benefit) for financial statement
purposes:
<TABLE>
<CAPTION>
NINE
MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------- ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
Income (loss) before tax ............. $(38.4) $ 6.0 $11.3
Federal statutory rate ............... 35.0% 35.0% 35.0%
----- ----- -----
Tax at Federal statutory rate ...... (13.4) 2.1 4.0
International tax rate differences.. 1.8 (3.2) (1.8)
State & local income/franchise
taxes ............................ (1.5) 0.3 (0.2)
Goodwill ........................... 3.3 8.1 9.7
In-process research & development .. 6.3 -- --
Integration costs .................. 1.3 3.5 1.6
Research & development credits ..... -- (0.7) (1.5)
Corporate costs .................... 0.5 0.8 1.3
Unearned compensation expense ...... 1.5 0.7 0.2
Other net .......................... (2.1) 4.2 3.8
----- ----- -----
Actual income tax provision (benefit) $(2.3) $15.8 $17.1
===== ===== =====
</TABLE>

Income taxes paid were $11.6 million, $24.4 million, and $13.3 million in
1997, 1998, and 1999, respectively.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of December 31, 1998, and
1999 were as follows:
<TABLE>
<CAPTION>

AS OF AS OF
DECEMBER 31, 1998 DECEMBER 31, 1999
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Deferred tax assets:
Bad debt, warranty and other reserves ...................... $ 3.5 $ 5.3
</TABLE>

F-27
<PAGE> 131
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, 1998 DECEMBER 31, 1999
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Inventory valuation ........................................ 6.0 9.4
Employee benefit obligations ............................... 2.0 1.8
Integration reserves ....................................... 8.6 3.2
Tax credits and loss carry forward ......................... 13.9 13.4
Deferred income ............................................ 8.1 9.9
Other ...................................................... 7.7 3.5
----- -----
Net deferred tax assets ...................................... 49.8 46.5
----- -----
Deferred tax liabilities:
Accelerated depreciation ................................... (16.9) (16.5)
Excess book basis over tax basis of identifiable
intangibles ............................................... (64.7) (55.7)
Other ...................................................... (2.6) (4.8)
Net deferred tax liabilities ................................. $ (84.2) $ (77.0)
----- -----
Net deferred tax liability ................................... $ (34.4) $ (30.5)
===== =====
</TABLE>

The Company has not accrued income taxes on cumulative undistributed
earnings of foreign subsidiaries of approximately $131.2 million as of December
31, 1999, since the majority of such earnings are expected to be permanently
reinvested abroad. Where it is the intention to remit earnings, the related
income taxes on these earnings, after giving effect to available tax credits,
would not be material. The Company believes that the determination of the
liability for the amount of unrecognized deferred taxes for temporary
differences related to investments in foreign subsidiaries that are permanent in
duration is not practicable.

At December 31, 1999, the Company has U.S. Federal, State and local tax
loss carryforwards and tax credit carryforwards, the combined tax effect of
which is approximately $13.4 million. These carryforwards will expire through
2019.

Prior to August 5, 1997, the Company operated as a fully integrated
division of Nycomed Amersham and as such was not a separate taxable entity.
Rather, the Company's taxable income was included in consolidated tax returns of
Nycomed Amersham and its affiliates in most jurisdictions. However, for the
purposes of these financial statements, the provision for income taxes for the
period from April 1, 1997 to August 5, 1997, has been allocated to the Company
based upon reported income before tax for the Company's operations relative to
total income before tax for the relevant jurisdictions. Income taxes, current
and deferred, are considered to have been paid or charged to Nycomed Amersham.
Income tax expense allocated in this manner was $6.1 million in 1997.

Domestic and foreign income (loss) before income taxes was as follows:
<TABLE>
<CAPTION>

NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ----------- ------------
(IN MILLIONS)
<S> <C> <C> <C>
United States... (38.8) (19.7) (13.1)
Foreign ........ 0.4 25.7 24.4
------ ----- -----
$(38.4) $ 6.0 $11.3
====== ===== =====
</TABLE>

F-28
<PAGE> 132

AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Cash paid for interest ............ $ 2.0 $ 10.1 $ 19.9
Cash paid for income tax .......... $ 11.6 $ 24.4 $ 13.3
Other non cash investing
activities:
Fair value of assets acquired ..... $ 709.6 $ 281.6
Liabilities assumed ............... (259.3) (97.3)
-------- --------
$ 450.3 $ 184.3
======== ========
Cash paid ......................... $ -- $ 202.6
Less cash acquired ................ -- (18.3)
Fair value of securities issued ... 450.3 --
-------- --------
Net cash paid ..................... $ -- $ 184.3
======== ========
</TABLE>

10. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)

<S> <C> <C>
Accounts receivable, trade ................... $ 209.4 $ 238.7
Other ........................................ 0.2 2.9
-------- --------
209.6 241.6
Less: allowance for doubtful accounts ........ 5.6 4.9
-------- --------
$ 204.0 $ 236.7
======== ========
</TABLE>

The allowance for doubtful accounts for the nine months ended December 31,
1997, and the years ended December 31, 1998 and December 31, 1999 consisted of
the following:

NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance at the beginning of the period .. $ 2.4 $ 3.4 $ 5.6
Provision for doubtful accounts ......... 1.7 2.1 1.4
Reduction for amounts written-off ....... (0.2) (0.1) (0.8)
Translation and other ................... (0.5) 0.2 (1.3)
------ ------ ------
</TABLE>

F-29
<PAGE> 133
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Raw materials and supplies ............. $ 25.2 $ 25.8
Work in process ........................ 32.6 29.2
Finished goods ......................... 32.1 59.4
-------- --------
$ 89.9 $ 114.4
======== ========
</TABLE>

12. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Land ..................................... $ 7.3 $ 7.0
Buildings and leasehold improvements ..... 125.8 154.7
Machinery and equipment .................. 180.0 207.2
Construction in process .................. 19.3 7.1
-------- --------
Total .................................... 332.4 376.0
Less accumulated depreciation ............ (133.0) (148.2)
-------- --------
Property, plant and equipment, net ....... $ 199.4 $ 227.8
======== ========
</TABLE>

Depreciation expense was $9.2 million, $23.7 million, and $25.3 million in
1997, 1998 and 1999, respectively.

F-30
<PAGE> 134
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)

<S> <C> <C>
Goodwill ............................... $ 446.8 $ 446.8
Less accumulated amortization .......... (44.5) (72.5)
-------- --------
Goodwill, net .......................... 402.3 374.3
-------- --------
Other intangible assets ................ 231.2 231.7
Less accumulated amortization .......... (57.1) (79.4)
-------- --------
Other intangible assets, net ........... 174.1 152.3
-------- --------
Total intangible assets ................ $ 576.4 $ 526.6
======== ========
</TABLE>

Amortization expense was $16.7 million, $38.1 million and $51.8 million in
1997, 1998 and 1999, respectively.

Goodwill relates primarily to the Pharmacia Biotech and Molecular Dynamics
Inc. acquisitions (see Note 6). Goodwill is amortized over periods ranging from
10 to 20 years, with a weighed average life of approximately 16.5 years at
December 31, 1999.

Other intangible assets also principally relate to the Pharmacia Biotech
and Molecular Dynamics Inc. acquisition. Other intangible assets are amortized
over periods ranging from 5 to 20 years with a weighted average life of
approximately 10.5 years at December 31, 1999.

14. SHORT AND LONG-TERM DEBT

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt:
Loans from parent ...................... $ 351.7 $ 395.9
Bank loans and overdrafts .............. 0.5 0.8
Finance lease obligations .............. 0.7 0.5
-------- --------
$ 352.9 $ 397.2
======== ========
</TABLE>

Loans from parent are with Nycomed Amersham and are borrowed in currencies
required by the Company's individual subsidiaries. The loans are unsecured and
bear interest at floating rates reflecting the cost of financing to Nycomed
Amersham in accordance with the Shareholder Agreement between Nycomed Amersham
and Pharmacia Corporation. These loans are repayable on demand with the
exception of a $38.2 million loan to the Company, which became repayable on 30
days notice on August 5, 1998. Bank loans and overdrafts are principally located
in the U.S. and bear varying rates of interest. Interest rates on the short-term
debt ranged from 1.2% to 9.0% at December 31, 1998 and from 0.8% to 8.5% at
December 31, 1999. The weighted average interest rate on the short-term debt was
6.4%, 5.9% and 5.4% in 1997, 1998 and 1999, respectively.

F-31
<PAGE> 135
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Long-term debt:
Bank loans ..................................... $ 11.8 $ 8.6
Finance lease obligations ...................... 5.5 4.5
------- -------
$ 17.3 $ 13.1
======= =======
Maturities of long-term debt are as follows:
2001 ........................................... $ 0.5 $ 0.5
2002 ........................................... 0.9 0.5
2003 ........................................... 0.8 0.5
2004 ........................................... 0.7 0.3
After 2004 ..................................... 14.4 11.3
------- -------
$ 17.3 $ 13.1
======= =======
</TABLE>

Bank loans relate primarily to Industrial Revenue Bonds with the City of
Milwaukee, Wisconsin which are unsecured and are repayable in 2009 and bear
interest at floating rates. The interest rate that applies to the bonds was 4.7%
and 4.5% at December 31, 1998 and December 31, 1999 respectively, and the
average interest rate for 1997, 1998, and 1999 was 4.36%, 4.14%, and 3.88%,
respectively.

On September 28, 2000, the Company and its shareholders, Nycomed Amersham
and Pharmacia, entered into an agreement under which the shareholders committed
to provide support to the Company of up to $500 million in the form of an
additional capital contribution or additional loans to the Company. The support
provided under this agreement is available in the event the Company is unable to
satisfy its obligations under the demand notes payable to Nycomed Amersham or
other third party obligations and is unable to obtain financing from other
sources.

15. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

Concentration of credit risk

The Company enters into a variety of financial instruments to reduce its
risk associated with fluctuations in foreign currency exchange rates. The
Company does not hold or issue financial instruments for trading purposes. As
all foreign currency exchange contracts are with Nycomed Amersham, the primary
source of concentrations of credit risk to the Company consist principally of
cash and short-term deposits. The Company controls credit risk by entering into
transactions involving financial instruments only with authorized counterparties
of strong credit quality consisting of a large number of major international
financial institutions. Counterparty positions are regularly monitored. At
December 31, 1999, the Company did not consider there to be any significant
concentration of credit risk.

The Company's minimum acceptable credit rating for counterparties, for the
purpose of the investment of surplus cash, is "A" from Standard & Poors. The
Company does not obtain collateral or other security to support financial
instruments subject to credit risk but monitors the credit standing of the
counterparties.

Foreign exchange risk management

The Company borrows in foreign currencies and enters into foreign exchange
contracts with Nycomed Amersham to reduce exposure to foreign exchange rate
fluctuations. The Company maintains foreign currency

F-32
<PAGE> 136
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

liabilities to reduce exposure on foreign currency investments and net assets.
The Company also enters into foreign exchange contracts to reduce the foreign
exchange risk on uncommitted anticipated transactions.

The contractual amounts of the Company's forward foreign exchange contracts
were as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1999
FORWARDS FORWARDS
----------------------- ----------------------
BUY SELL BUY SELL
---------- ---------- ----------- --------
(IN MILLIONS)

<S> <C> <C> <C> <C>
U.S. Dollars ..... $ -- $ 32.5 $ -- $ 32.1
Euro Currencies .. -- 55.6 -- 10.5
Japanese Yen ..... -- 10.0 -- 8.7
GB Sterling ...... 42.7 3.7 40.3 1.9
Swedish Krona .... 84.0 1.7 24.0 1.5
Other ............ -- 19.3 -- 7.5
-------- -------- ------- -------
Total ............ $ 126.7 $ 122.8 $ 64.3 $ 62.2
======== ======== ======= =======
</TABLE>

As the Company's foreign exchange contracts do not qualify for hedge
accounting under SFAS No. 52, gains or losses related to these contracts are
recorded in earnings as incurred, based on movements in forward currency rates.

The net transaction gain (loss) included in net income is as follows:

<TABLE>
<CAPTION>
(IN MILLIONS)

<S> <C>
Nine months ended December 31, 1997 ...................... $ 0.7
Year ended December 31, 1998 ............................. $ 3.7
Year ended December 31, 1999 ............................. $ (1.3)
</TABLE>

Fair value of financial instruments

The carrying value of the Company's foreign currency exchange contracts
reflects their fair value as gains (losses) are recorded as incurred on the
contracts.

The carrying amount of the Redeemable Preferred Stock (see Note 16)
approximates fair value as the Preferred Stock is convertible into a fixed
dollar amount of Common Stock which corresponds to its carrying value.

Due to the short-term nature of the Company's non derivative financial
assets and liabilities, the fair value of these instruments approximates
carrying amount. The fair value of the Company's Industrial Revenue Bonds (IRB)
approximates fair value as the interest rate is adjusted weekly.

16. REDEEMABLE PREFERRED STOCK

At December 31, 1998 and 1999 the Company had 67,916,327 shares of 8%
Redeemable Cumulative Preferred stock (the "preferred stock") issued and
outstanding. 55% of these shares are owned by Nycomed Amersham and 45% of these
shares were issued to Pharmacia Corporation as consideration in the PB
acquisition.

F-33
<PAGE> 137
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

All preferred stock was issued at its par value of (pound sterling) 1
($1.62 equivalent) each, and accrues a dividend of 8% per year, payable annually
in arrears on each anniversary date of the date of issuance. As of December 31,
1999 no dividends had been declared or paid related to the preferred shares.

The preferred stock carries no voting rights, other than in any matter
which directly affects the rights and privileges of the preferred stock, and has
priority over any other class of the Company's stock upon the liquidation,
winding-up, or other return of capital of the Company.

The preferred stock is redeemable at the option of the holder, as described
below, at par value plus any accumulated but unpaid dividends on the date of
redemption (the "nominal value"). Additionally, the preferred stock can be
converted into shares of common stock of the Company at a ratio determined by
dividing the nominal value of the preferred stock by the fair value of the
common stock, as defined in the preferred stock Articles.

The holder of the preferred stock can elect to redeem or convert the stock
on or after the earlier of a public stock offering (as defined in the preferred
stock Articles) or the fifth anniversary of the stock's issuance.

As the redemption of the preferred stock is outside the control of the
Company, the preferred stock and any accumulated but unpaid dividends are not
included in the equity portion of the Company's balance sheet. The annual
dividend accretion is charged to retained earnings as a dividend and deducted
from net income (loss) available to common stockholders in the computation of
earnings per share. Accumulated dividends of $12.9 million and $22.8 million
were accrued at December 31, 1998 and 1999, respectively. The amount of
dividends charged to retained earnings and deducted from net loss available to
common stockholders amounted to $3.6 million, $9.3 million, and $9.9 million for
the nine months ended December 31, 1997 and the years ended December 31, 1998
and 1999, respectively.

17. COMMON STOCK

At December 31, 1998 and 1999 the Company had authorized and issued
1,000,000 common shares with a $1.60 par value. These shares are divided into
550,000 "A" ordinary shares and 450,000 "B" ordinary shares.

"A" ordinary shares and "B" ordinary shares rank pari passu for dividends
and in priority and for amounts on a winding-up. At a general meeting, each "A"
shareholder is entitled to one vote for every "A" ordinary share of which he is
a holder and each "B" shareholder is entitled to one vote for every "B" ordinary
share of which he is a holder. However, "A" ordinary shares do not confer any
right to vote upon a resolution for the removal from office of a director
appointed by holders of "B" ordinary shares and "B" ordinary shares do not
confer any right to vote upon a resolution for the removal from office of a
director appointed by holders of "A" ordinary shares.

Under the Stockholders Agreement, there is a requirement for the "A"
stockholders and the "B" stockholders to approve certain specified matters.

18. STOCK-BASED COMPENSATION

Certain employees of the Company participate in Nycomed Amersham sponsored
performance based stock option plans. Grants pursuant to the plans are at the
market price of Nycomed Amersham shares at the date of grant and include
restrictions on vesting until certain performance targets are met. Unearned
compensation expense, which is shown as a separate component of stockholders'
equity, has been recorded pursuant to the intrinsic value approach under APB 25
based on the market value of Nycomed Amersham stock at the end of each period
and is being amortized over the vesting period based upon expectations of
meeting these performance targets. Amortization of unearned compensation was
$4.2 million, $2.0 million, and $0.9 million in 1997, 1998, and 1999,
respectively.

Had compensation expense for Nycomed Amersham's stock option grants been
determined consistent with the fair value approach of Statement of Accounting
Standards No. 123, which requires recognition of compensation

F-34
<PAGE> 138
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

cost ratably over the vesting period of the underlying instruments and had such
compensation cost been allocated to the Company, the Company's net (loss) would
have been adjusted to the amounts indicated below:

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------------ ------------- -------------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net (Loss)
As reported .................... $ (36.1) $ (10.5) $ (6.3)
Pro forma ...................... $ (32.4) $ (9.9) $ (7.9)
Basic and diluted earnings per share
As reported .................... $ (49.63) $ (19.80) $ (16.20)
Pro forma ...................... $ (45.00) $ (19.20) $ (17.80)
</TABLE>

The Company estimated the fair value, as of the date of grant, of options
outstanding in the plan using the Black-Scholes option pricing model with the
following assumptions:

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------ ------------
<S> <C> <C> <C>
Expected life (years) .......... 5.0 5.0 4.4
Risk-free interest rate % ...... 7.2 6.4 5.6
Expected dividend yield % ...... 1.9 1.9 1.8
Expected volatility % .......... 18.0 22.0 35.0
</TABLE>

The fair value of options granted in the nine months ended December 31,
1997 and the years ended December 31, 1998 and 1999 were $2.3 million, $3.8
million, and $4.2 million, respectively.

19. COMMITMENTS AND CONTINGENCIES

The Company is involved in various patent infringement actions with PE
Corporation and its divisions, including those in which the Company is both
plaintiff and defendant, related to DNA sequencing technologies. In one action
where the Company is a plaintiff, a recent patent claims construction hearing
was ruled in favor of the Company. In a number of consolidated actions, the
Company is both plaintiff and defendant, and a similar claims construction
hearing has been heard and not adjudicated. These cases will not be heard until
2001. Additionally, in May 2000 PE Corporation filed a further patent
infringement suit against the Company. The Company is vigorously contesting
these claims. However, it is not possible to predict with certainty the outcome
of this litigation, and while the Company does not believe an adverse result
would have a material effect on the Company's consolidated financial position,
it could be material to the results of operations or cash flows for a fiscal
year.

The Company is also involved in other litigation arising out of the
ordinary cause of business, including those relating to product liability and
infringements of intellectual property and validity of patents. Although the
amount of any liability that might arise with respect to any of these matters
cannot be accurately predicted, the resulting liability, if any, will not in the
opinion of the management have a material adverse effect on the consolidated
financial position, results of operations or cash flows of the Company.

F-35
<PAGE> 139
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the manufacturing agreement related to the Cardiff site
(see Note 22), Nycomed Amersham has retained any liabilities related to the
radioactive decommissioning of the site which pertain to the period prior to
August 4, 1997. In the event that the U.K. Nuclear Installations Inspectorate
agrees to grant a nuclear license to the Company and the Cardiff site is
transferred to the Company, or in the event that the Company terminates the
manufacturing agreement related to the Cardiff site, the Company is obligated to
reimburse Nycomed Amersham for radioactive decommissioning and waste disposal
costs related to the period after August 4, 1997.

20. EMPLOYEE BENEFIT PLANS

The Company's employees receive retirement benefits under three types of
arrangements: participation in State arrangements, participation in the Nycomed
Amersham plans or participation in one of the Company's plans.

State Arrangements

In many of the countries in which the Company operates, pension benefits
are provided entirely through state arrangements and the relevant subsidiary
therefore does not provide any sponsored pension plans in those countries.

Nycomed Amersham Plans

In other countries, principally the United Kingdom, the Company has elected
to continue its participation in the Nycomed Amersham Plan which operates in
that country. The principal plans in the U.K., are defined benefit arrangements.
Eligibility for participation in these plans is open to all permanent UK
employees and benefits are generally based on employee's compensation and years
of service. Nycomed Amersham's funding policy is consistent with funding
requirements of the applicable laws and regulations regarding such requirements
in the corresponding countries in which the plans operate.

Since the aforementioned pension arrangements are part of certain Nycomed
Amersham defined plans, no discrete actuarial data is available for the portion
allocable to the Company. Therefore, no benefit liability or asset is reflected
in the accompanying financial statements. The Company has been allocated pension
costs representing amounts payable to these schemes. Net pension expense
included in the accompanying financial statements was $1.9 million, $1.5 million
and $1.3 million for the nine months ended December 31, 1997 and the years ended
December 31, 1999 and 1998, respectively.

Company Plans

The Company also operates non-contributory defined benefit pension plans
for certain of its employees (principally PB employees and employees hired after
the PB acquisition) in the United States, Europe and Japan covering a majority
of its employees in these locations. For employees eligible to join the Swedish
and U.S. schemes, benefits are based on compensation and years of service. The
Japanese pension plan operates on a points based system where the number of
points earned in a year is based on the employees current grade. The value of
the points is set by the Company and reviewed periodically. The Company's
funding policy is based on local practices. Plan assets are separately
administered and are invested primarily in equities and bonds.

Net pension expense for the Company's plans included in the Statement of
Income is comprised of the following:

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------ --------------
(IN MILLIONS)
Components of net periodic benefit cost:
<S> <C> <C> <C>
Service cost ........................... $ 1.6 $ 4.5 $ 5.7
Interest cost .......................... 1.6 4.0 3.9
</TABLE>

F-36
<PAGE> 140
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
----------------- ------------ --------------
<S> <C> <C> <C>
Expected return on plan assets ......... (0.4) (1.2) (1.0)
Recognized net actuarial loss .......... -- -- 0.3
------ ------ ------
Net periodic benefit cost .............. $ 2.8 $ 7.3 $ 8.9
====== ====== ======
</TABLE>

The following provides a reconciliation of benefit obligations, plan
assets, and funded status of the plans:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at January 1 .......... $ 70.0 $ 80.8
Service cost ............................. 4.4 5.7
Interest cost ............................ 3.9 3.9
Change in assumptions .................... 9.1 (15.7)
Actuarial gain ........................... (2.2) (0.3)
Settlements .............................. (0.6) --
Benefits paid ............................ (1.1) (1.2)
Foreign currency translation ............. (0.6) (0.3)
------- -------
Benefit obligation at December 31 ........ $ 82.9 $ 72.9
======= =======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Change in plan assets:
Fair value of plan assets at January 1 ..... $ 16.6 $ 14.4
Actual return on plan assets ............... (1.8) 1.0
Benefits paid .............................. (0.3) (0.2)
Foreign currency translation ............... 0.3 0.7
------- --------
Fair value of plan assets at December 1 .... $ 14.8 $ 15.9
======= ========
Funded status .............................. $ (68.1) $ (57.0)
Unrecognized net actuarial (gain) loss ..... 12.5 (3.9)
------- --------
Accrued benefit obligation ................. $ (55.6) $ (60.9)
======= ========
</TABLE>

The weighted average rate assumptions used in determining pension costs and
the projected benefit obligation were:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Weighted average assumptions (%):
Discount rate ................................ 4.8 6.1
Rates of return on plan assets ............... 7.2 7.6
Salary growth ................................ 4.4 4.1
Pension increases ............................ 2.0 2.4
</TABLE>

F-37
<PAGE> 141
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the United States, the Company also offers employees and employee
savings plan under which U.S. employees may contribute up to 16% of their
compensation, subject to certain limitations. The Company matches employee
contributions up to 100% for the first 3% and 50% for the next 2% of
compensation contributed by the employee. Under this plan, matching
contributions made in cash by the Company were $0.4 million, $1.1 and $1.4 for
the nine months ended December 31, 1997 and the years ended December 31, 1998
and 1999, respectively.

21. LEASE COMMITMENTS

The Company leases certain equipment under capital leases. Property and
equipment at December 31, 1998 and 1999, include approximately $4.3 million and
$3.9 million respectively, of equipment under leases which have been
capitalized. Accumulated depreciation for such equipment was approximately $0.5
million and $0.9 million at December 31, 1998 and 1999.

Future minimum lease commitments at December 31, 1999 are as follows:

<TABLE>
<CAPTION>
CAPITAL LEASES OPERATING LEASES
(IN MILLIONS)

<S> <C> <C>
Year Ending December 31
2000 ............................................. $ 0.8 $ 6.0
2001 ............................................. 0.6 3.7
2002 ............................................. 0.5 2.4
2003 ............................................. 0.5 1.6
2004 ............................................. 0.5 1.0
After 2004 ....................................... 3.9 1.6
------ -------
Total minimum lease payments ..................... $ 6.8 $ 16.3
Less: amount representing interest .......... (1.8)
------ =======
Present value of net minimum lease payments ...... 5.0
Less: current portion ....................... (0.5)
------
Long-term capitalized lease obligations .......... $ 4.5
======
</TABLE>

22. FORMATION OF APB LTD.

ALS ASSETS NOT TRANSFERRED

At the time of the acquisition of PB, ALS operations were transferred to
legal entities owned by APB Ltd. in order to more clearly segregate the
operations of the Company from the rest of Nycomed Amersham's operations.
However, due to regulatory circumstances in certain jurisdictions, not all ALS
assets and operations could be transferred to APB Ltd., and therefore reverted
to Nycomed Amersham. The principal assets and operations affected by this are as
follows:

Cardiff manufacturing facility

The manufacturing facility in Cardiff manufactures radioactive products
which require a nuclear manufacturing permit. This permit is currently held by
Nycomed Amersham (see Note 19).

The Company and Nycomed Amersham have entered into a manufacturing
agreement under which Nycomed Amersham supplies the Company with the products
manufactured at Cardiff. The Company manages the operations of the Cardiff
facility, which produces only the Company's products. All of the costs in
connection with operating the Cardiff facility have been included in the
Company's results of operations for all periods presented.

F-38
<PAGE> 142
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The assets of the Cardiff facility are not included in the Company's
financial statements. Had the transfer of the Cardiff facility occurred at
December 31, 1999 the net assets of the Company would have been approximately
$23.5 million higher.

European sales offices

In certain countries, principally France, and Italy, ALS sales operations
were not transferred into legal entities owned by the Company until 1998. The
sales offices were operated under agency agreements between the Company and
Nycomed Amersham, which effectively transferred the financial benefits and risks
of the ALS operations of these sales offices until such time as legal entities
were established to effect the transfers.

In addition, ownership of certain European sales offices which conducted
non-ALS operations of Nycomed Amersham were transferred to the Company in their
entirety. Agency agreements were established between the Company and Nycomed
Amersham which effectively transferred the financial risks and benefits of the
non-ALS operations of these sales offices to Nycomed Amersham until such time as
the non-ALS operations of these sales offices were transferred to Nycomed
Amersham.

Substantially all of the required transfers of operations between the
Company and Nycomed Amersham to align legal entities with business segments were
completed during 1998.

In connection with these transfers of operations, the following
transactions, totaling $69.1 million, have been reflected as a reduction in
equity during the nine months ended December 31, 1997:

- The net assets of the Cardiff facility, amounting to approximately
$48.9 million, reverted to Nycomed Amersham.

- A payment of approximately $20.2 million, representing a return of
earnings, was made to Nycomed Amersham.

Conversion of Investment

In addition, a portion of Nycomed Amersham's investment in ALS was
converted into debt and preferred stock of APB Ltd. These transactions, totaling
$99.5 million, have been reflected as a reduction in equity during the nine
months ended December 31, 1997:

- Approximately $38.2 million of Nycomed Amersham's investment was
converted into a note payable to Nycomed Amersham which became due
upon 30 days notice in August 1998.

- Approximately $61.3 million of Nycomed Amersham's investment was
converted into 8% redeemable cumulative preferred stock of APB Ltd.

23. TRANSACTIONS WITH NYCOMED AMERSHAM

Loans and other financing arrangements

The Company has borrowed amounts from Nycomed Amersham under uncommitted
intercompany loan facilities which are repayable upon demand. Amounts are drawn
down by local subsidiaries in the currency in which the subsidiary operates, and
bear interest at floating rates reflecting the cost of financing to Nycomed
Amersham. The loans are repayable upon demand with the exception of $37.3
million, which is repayable on 30 days notice. The amount of loans outstanding
with Nycomed Amersham at December 31, 1998 and 1999 were $351.7 million and
$395.9 million, respectively. The weighted average interest rate of loans
outstanding was 6.4%, 5.9%, and 5.4% for 1997, 1998, and 1999, respectively, and
interest paid to Nycomed Amersham on these loans was $2.5 million, $13.3
million, and $21.1 million for 1997, 1998, and 1999, respectively.

F-39
<PAGE> 143
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additionally, the Company participates in Nycomed Amersham's cash
management program, and earns interest on amounts held on deposit with Nycomed
Amersham. The interest received on deposits with Nycomed Amersham amounted to
$0.3 million, $2.3 million, and $1.5 million for 1997, 1998, and 1999,
respectively.

Prior to August 5, 1997, the Company operated as a fully integrated
division of Nycomed Amersham without a separate legal entity structure. Interest
expense for this period has been allocated to the Company by applying Nycomed
Amersham's weighted average consolidated interest rate for the period to the
portion of Nycomed Amersham's investment in the ALS business deemed to be
financed by debt, which has been determined based on Nycomed Amersham's debt to
equity ratio at March 1997. Interest expense charged to the business in this
manner amounted to $0.4 million for the nine months ended December 31, 1997 at
an average interest rate of 5.5%.

Manufacturing agreement

Nycomed Amersham continues to operate the Cardiff manufacturing facility
under a contract manufacture agreement with the Company (see Notes 2 and 22).
Payments to Nycomed Amersham under the Cardiff manufacturing agreement were
$63.0 million, $130.9 million, and $143.3 million for 1997, 1998, and 1999
respectively.

Service agreements

Nycomed Amersham provides the Company with certain services, including
information technology support, logistics, and other administrative support
services, under shared service arrangements. Additionally, the Company provides
Nycomed Amersham with certain support services related to information technology
support for the Cardiff site.

Costs charged to and from Nycomed Amersham were as follows:

Allocated Support Services

Nycomed Amersham also provides central corporate and administrative support
services, including finance, treasury, legal and human resources support, to the
Company without reimbursement. The cost of these services has been allocated to
the Company based on allocations deemed reasonable by management for each
function, principally based on the proportion of time spent by personnel in each
department on the Company's matters relative to other Nycomed Amersham group
matters. The amount of costs allocated to and not reimbursed by the Company was
$1.3 million, $2.5 million, and $3.8 million for 1997, 1998, and 1999,
respectively. These costs have been reflected as an expense of the Company and a
capital contribution by Nycomed Amersham in the year the service was provided in
the accompanying financial statements.

Prior to August 5, 1997, the Company operated as a fully integrated
division of Nycomed Amersham. As such, Nycomed Amersham provided selling,
general, and administrative services to the ALS business. The costs of these
services have been allocated to the Company based on the proportion of time
spent by personnel in each department on ALS matters relative to the matters of
Nycomed Amersham group and its other operating divisions, which management deems
to be a reasonable basis of allocation. The amount of selling, general, and
administrative service costs allocated to the Company from April 1, 1997 to
August 5, 1997 amounted to $22.4 million.

F-40
<PAGE> 144
AMERSHAM PHARMACIA BIOTECH LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Product Sales

The Company sells certain of its products to Nycomed Amersham and its
subsidiaries. These sales amounted to $9.8 million, $13.8 million, and $13.8
million for 1997, 1998, and 1999, respectively.

Amounts due to and from Nycomed Amersham

Amounts due to and from Nycomed Amersham related to the above transactions
at December 31, 1998 and 1999 were as follows:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, DECEMBER 31,
1998 1999
------------ -----------
(IN MILLIONS)
<S> <C> <C>
Payables due to Nycomed Amersham ............... $ 24.1 $ 21.5
Loans due to Nycomed Amersham .................. $ 351.7 $ 395.9
Receivables from Nycomed Amersham .............. $ 11.1 $ 6.6
Short-term deposits held by Nycomed Amersham ... $ 8.1 $ 6.8
</TABLE>

F-41
<PAGE> 145
REPORT OF INDEPENDENT ACCOUNTANTS

To the management of Pharmacia Biotech:

In our opinion, the accompanying consolidated statements of operations and
cash flows present fairly, in all material respects, the results of operations
and cash flows of Pharmacia Biotech, an integrated division of Pharmacia
Corporation ("PHA"), as defined in Note 1 to the consolidated financial
statements for the period ended July 31, 1997, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Pharmacia Biotech's management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.

Pharmacia Biotech is a fully integrated division of PHA. Consequently, as
indicated in Note 2, these financial statements have been derived from the
accounting records of PHA and reflect significant assumptions and allocations.
Moreover, as indicated in Note 9, Pharmacia Biotech relies on PHA for certain
administrative, management and other services. The results of operations and
cash flows of Pharmacia Biotech could differ from those that would have resulted
had Pharmacia Biotech operated autonomously or as an entity independent of PHA.

/s/ PricewaterhouseCoopers
--------------------------
Chartered Accountants
London, England
September 22, 2000

F-42
<PAGE> 146
PHARMACIA BIOTECH AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SEVEN MONTHS ENDED
JULY 31, 1997
------------------
(IN MILLIONS)
<S> <C>
Net sales ................................................. $ 233.2
Cost of sales ............................................. (93.3)
--------
Gross profit .............................................. 139.9

Selling, administrative and general expenses .............. (104.3)
Research and development expenses ......................... (22.2)
Allocated expenses from Pharmacia Corporation ............. (4.7)
--------
Total operating expenses .................................. (131.2)
--------
Operating income .......................................... 8.7

OTHER (EXPENSE) INCOME:
Interest expense .......................................... (5.5)
Interest income ........................................... 0.6
Other, net ................................................ 1.2
--------
Income before income taxes ................................ 5.0
Income tax provision ...................................... (4.5)
--------
Net income ................................................ $ 0.5
========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

F-43
<PAGE> 147
PHARMACIA BIOTECH AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED
JULY 31, 1997
-------------
(IN MILLIONS)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................................................. $ 0.5
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization ............................................... 15.6
Gain on sale of assets ...................................................... 0.7
Deferred income taxes ....................................................... 0.7
-------
17.5
Changes in assets operating and liabilities:
Accounts receivables ........................................................ 13.6
Inventories ................................................................. 8.2
Accounts payable ............................................................ (10.5)
Income taxes payable ........................................................ (2.4)
Other current and non current assets and liabilities ........................ (44.1)
-------
Net cash used by operating activities ....................................... (17.7)
-------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ........................................................ (12.7)
-------
Net cash used by investing activities ....................................... (12.7)
-------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in advances from parent .......................................... 6.7
Payments on long-term debt .................................................. (0.1)
Issuance of common stock .................................................... 26.0
-------
Net cash provided by financing activities ................................... 32.6
Effect of exchange rates on cash ............................................ (1.8)
-------
Net change in cash and cash equivalents ..................................... 0.4
Cash and cash equivalents at beginning of the period ........................ 7.5
-------
Cash and cash equivalents at end of the period ............................. $ 7.9
=======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

F-44
<PAGE> 148
PHARMACIA BIOTECH AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE PHARMACIA BIOTECH BUSINESS

Pharmacia Biotech is an international provider of biotechnology systems,
products and services for research into genes and proteins and the manufacture
of drugs based on biological molecules, also known as biopharmaceuticals.

The Pharmacia Biotech business is organized into one principal line of
business, biotechnology. The business also has a regional organization structure
consisting of five major markets:- North America, Europe, Japan, Asia Pacific
and the Rest of the World. Geographical segment details are outlined in Note 3.

The Pharmacia Biotech business is owned 100% by the Pharmacia Corporation
("PHA").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements reflect the operations
and cash flows for the seven months ended July 31, 1997 of the former Pharmacia
Biotech subsidiaries and divisions ("Pharmacia Biotech") of PHA that were
acquired on August 5, 1997 by Amersham Pharmacia Biotech Ltd. These consolidated
financial statements reflect the results of the operations and cash flows of the
business acquired on August 5, 1997. All significant intercompany accounts and
transactions have been eliminated.

As an integrated business of PHA, Pharmacia Biotech did not prepare
separate financial statements in accordance with generally accepted accounting
principles in the United States ("U.S. GAAP") in the normal course of
operations. Accordingly, the accompanying financial statements have been derived
by extracting the assets, liabilities and revenues and expenses of Pharmacia
Biotech from the accounting records of PHA. The accompanying financial
statements reflect revenue and expenses directly attributable to Pharmacia
Biotech as well as allocations deemed reasonable by management to present the
results of operations and cash flows of Pharmacia Biotech on a stand-alone
basis. The allocation methodologies have been described within the respective
footnotes and management considers the allocations to be reasonable. However,
the results of operations and cash flows of Pharmacia Biotech may differ from
those that may have been achieved had Pharmacia Biotech operated autonomously as
an entity independent of PHA.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires the management of Pharmacia Biotech to
make estimates and assumptions that affect the reported amounts of revenue and
expenses during the reported period. The most significant assumptions and
estimates are related to the allocation of expenses from PHA and the calculation
of income taxes. Actual results could differ from these estimates.

CURRENCY TRANSLATION

Pharmacia Biotech treats the local currencies of its international
operations as their respective functional currencies. Income statement and cash
flow amounts are translated using the average exchange rates in effect during
the period.

Gains and losses resulting from foreign currency transactions are included
in the results of operations and are immaterial to the period presented.

F-45
<PAGE> 149
PHARMACIA BIOTECH AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CURRENCY EXCHANGE CONTRACTS

Forward foreign currency exchange contracts are held for purposes other
than trading. Contracts held to hedge anticipated transactions are marked to
market at each balance sheet date with resulting gains and losses recognized in
earnings.

REVENUE RECOGNITION

Revenues from product sales are recognized when goods are shipped and title
and risk of loss passes to the customers.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred.

PROPERTY, PLANT AND EQUIPMENT

Depreciation is computed principally using the straight-line method of
depreciation based on the estimated useful life of the assets. Maintenance and
repair costs are charged to earnings as incurred. Upon retirement or other
disposition of property, any gain or loss is included in earnings.

GOODWILL AND OTHER INTANGIBLES

Goodwill represents the excess of the purchase cost over the fair value of
net assets acquired in a business or product acquisition and is amortized on a
straight-line basis over periods ranging primarily from 5 to 20 years.
Amortization of rights acquired under patent are calculated on a straight-line
basis over the remaining legal lives of the patent. Other intangibles are
amortized over the useful lives of those assets. Pharmacia Biotech continually
reviews its intangible assets to evaluate whether events or changes have
occurred that would suggest an impairment of carrying value. An impairment would
be recognized when the undiscounted cash flows estimated to be generated by the
intangible asset are less than the carrying value.

LONG-LIVED ASSETS

Statement of Financial Accounting Standards No. 121 ("SFAS 121")
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" requires impairment losses to be recorded on long-lived assets
used in operations when indications of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. The amount of impairment loss recorded is based
upon discounted future cash flows estimated to be generated by those assets.

SEGMENT INFORMATION

Statement of Financial Accounting Standards No. 131 ("SFAS 131"),
"Disclosures about Segments of an Enterprise and Related Information" requires
segment information to be prepared using the "management" approach. The
"management" approach is based on the method that management organizes the
segments within the Company to make operating decisions and to assess
performance. SFAS 131 also requires disclosures about products and services,
geographic areas, and major customers.

3. BUSINESS AND GEOGRAPHICAL SEGMENTS

Pharmacia Biotech is engaged principally in one line of business,
biotechnology.

A geographical analysis of net sales (by country of origin) is set out
below:

F-46
<PAGE> 150
PHARMACIA BIOTECH AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
SEVEN MONTHS ENDED
JULY 31, 1997
------------------
(IN MILLIONS)
<S> <C>
NET SALES
Sweden ............................................... $ 120.8
Rest of Europe ....................................... 100.3
North America ........................................ 106.6
Japan ................................................ 36.2
Asia Pacific ......................................... 15.6
Rest of world ........................................ 0.9
--------
380.4
Less inter-segment sales ............................. (147.2)
--------
$ 233.2
========
</TABLE>

An analysis of net sales by geography based on market of sale is as
follows:
<TABLE>
<CAPTION>
SEVEN MONTHS ENDED
JULY 31, 1997
------------------
(IN MILLIONS)
<S> <C>
NET SALES
Europe ............................................. $ 85.4
North America ...................................... 84.2
Japan .............................................. 36.2
Asia Pacific ....................................... 14.2
Rest of world ...................................... 13.2
--------
$ 233.2
========
</TABLE>

4. LEASE COMMITMENTS

Total rental expense directly related to Pharmacia Biotech's operations
amounted to $5.1 million in the seven months to July 31, 1997 and has been
included in selling, general and administrative expenses.

5. INCOME TAXES

For those divisions of Pharmacia Biotech which were not a separate taxable
entity in any jurisdiction and whose taxable income is included in a
consolidated income tax return of PHA, the provision for income taxes has been
allocated based upon its income before income tax and the statutory rate for
that jurisdiction.

The provision for income taxes consisted of:

<TABLE>
<CAPTION>
SEVEN MONTHS ENDED
JULY 31, 1997
------------------
(IN MILLIONS)
<S> <C>
Current tax provision
U.S. federal ........................................... $ 0.4
Non U.S. ............................................... 3.4
------
Total current tax provision ............................ $ 3.8
------
</TABLE>

F-47
<PAGE> 151
PHARMACIA BIOTECH AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
SEVEN MONTHS ENDED
JULY 31, 1997
------------------
(IN MILLIONS)
<S> <C>
Deferred tax provision
U.S. federal ........................................... $ 2.6
State and local ........................................ 0.3
Non U.S. ............................................... (2.2)
------
Total deferred tax provision ........................... $ 0.7
------
Provision for income taxes ............................. $ 4.5
======
</TABLE>

The effective tax rate differs from the statutory tax rate for the
following reasons:

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED
JULY 31, 1997
-------------
(IN MILLIONS)

<S> <C>
RECONCILIATION OF INCOME TAX PROVISION TO STATUTORY RATE ON INCOME
Profit before taxes .............................................. $ 5.0
Statutory tax rate ............................................... 35%
-------
Expected tax provision ........................................... $ 1.8
International tax rate differences ............................... 1.5
Non deductible Goodwill .......................................... 1.2
-------
Actual income tax provision ...................................... $ 4.5
=======
</TABLE>

6. SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED
JULY 31, 1997
-------------
(IN MILLIONS)
<S> <C>
Interest paid ........................................ $ 5.3
Income taxes paid .................................... $ 5.9
</TABLE>

7. RETIREMENT BENEFIT PLANS

In many of the countries in which Pharmacia Biotech operates, PHA has
various defined benefit pension plans which operate independently of PHA defined
benefit arrangements and are offered to Pharmacia Biotech employees only.
Benefits provided under these plans are primarily based on years of service and
the employee's compensation. The following tables summarize the net benefit cost
and the weighted-average assumptions for the period ended July 31, 1997.

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED
JULY 31, 1997
-------------
(IN MILLIONS)
<S> <C>
Components of net periodic benefit cost:
Service cost ............................................. $ 1.3
Interest cost ............................................ 1.3
</TABLE>

F-48
<PAGE> 152
PHARMACIA BIOTECH AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED
JULY 31, 1997
-------------
(IN MILLIONS)
<S> <C>
Expected return on plan assets ........................... (0.1)
Amortization of prior service cost ....................... --
------
Amortization of transitional asset ....................... --
------
Recognized net actuarial loss ............................ 0.3
------
NET PERIODIC BENEFIT COST ................................ $ 2.8
======
Weighted average assumptions:
Discount rate ............................................ 6.1%
Rates of return on plan assets ........................... 6.8%
Salary growth ............................................ 3.1%
</TABLE>

8. FINANCIAL INSTRUMENTS

As Pharmacia Biotech's foreign exchange contracts do not qualify for hedge
accounting under Statement of Financial Accounting Standards No. 52 ("SFAS 52")
"Foreign currency translation", gains or losses on foreign currency contracts
are recorded in earnings as incurred, based on movements in forward currency
rates. The aggregate transaction gain included in earnings in the seven month
period to July 31, 1997 was $4.1 million.

9. TRANSACTIONS WITH PHARMACIA CORPORATION

Pharmacia Biotech relies on PHA for certain services including treasury,
taxes, risk management, and senior executive support. Although certain expenses
related to services have been allocated to Pharmacia Biotech, the consolidated
results of operations and cash flows presented in the accompanying financial
statements may not have been the same as those that would have occurred had
Pharmacia Biotech been an independent entity. The following describes the
related party transactions:

SALES

Net product sales to PHA were $2.0 million for the seven month period ended
July 31, 1997.

SHARED SERVICE COSTS

During the seven month period to July 31, 1997 Pharmacia Biotech utilized
services provided by PHA. Such services included but were not limited to real
estate, insurance and security. An amount of $7.4 million was recorded in the
accompanying financial statements based on the actual amounts invoiced for such
services rather than on an allocated basis.

ALLOCATION OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Pharmacia Biotech has been allocated a portion of the PHA central support
functions. These costs include the central departments of tax and treasury as
well as certain central management and board support costs. The amount of these
costs is separately identified on the statement of operations. Such costs have
been allocated to Pharmacia Biotech based on sales. Management believes these
allocations are reasonable.

F-49
<PAGE> 153
PHARMACIA BIOTECH AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENSIONS

In the United States, employees are provided with pension benefits through
the PHA defined benefit arrangements that operate in that country. Eligibility
for participation in these plans vary and benefits are generally based on
employees' compensation and years of service. PHA's funding policy is consistent
with funding requirements of the laws and regulations in the United States.
Since the aforementioned pension arrangement is part of certain PHA defined
benefit plans, no discrete actuarial data is available for the portion allocable
to these plans. Pharmacia Biotech has been allocated pension costs for these
plans based upon participant employee headcount. There was no net pension
expense included in the accompanying financial statements for the period ended
July 31, 1997.

CASH POOLING ARRANGEMENTS

During the seven month period ending July 31, 1997, Pharmacia Biotech
participated in the PHA cash pooling arrangements. Balances are swept daily and
surplus funds placed on deposit. Interest is paid (credited) to subsidiaries
through the cash pooling system on normal commercial terms. Interest paid to
Pharmacia Biotech on cash pool deposits was $0.3 million in the seven month
period to July 31, 1997.

Overdraft funding was additionally provided to Pharmacia Biotech during
this period. Interest charged on the overdraft facility in the seven month
period to July 31, 1997 was $3.9 million.

F-50
<PAGE> 154
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors
of APBiotech Inc:

In our opinion, the accompanying balance sheet presents fairly, in all material
respects, the financial position of APBiotech Inc (the ''Company'') at
August 31, 2000 in conformity with accounting principles generally accepted in
the United States. This balance sheet is the responsibility of the Company's
management; our responsibility is to express an opinion on this balance sheet
based on our audit. We conducted our audit of this statement in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
September 28, 2000

F-51
<PAGE> 155
APBIOTECH INC

BALANCE SHEET

<TABLE>
<CAPTION>
AS OF
AUGUST 31, 2000
---------------
<S> <C>
ASSETS
Cash ...................................................... $100
====
EQUITY
Common stock, $1 par value, 100 shares
authorized, issued and outstanding .................... $100
====
</TABLE>

NOTE TO BALANCE SHEET

APBiotech Inc (formerly Fulham Corp.) (the "Company") is a corporation that
was formed under the General Corporation Law of the State of Delaware on May 24,
2000 for the purpose of purchasing the existing outstanding stock of Amersham
Pharmacia Biotech Ltd. ("APBiotech Ltd.") and subsequently offering a portion of
its common stock for sale in an initial public offering (the "IPO").

The acquisition of APBiotech Ltd. from its current owners, Nycomed Amersham
and Pharmacia Corporation, will be effected through the incurrence of
indebtedness to Nycomed Amersham and the issuance of common stock to Nycomed
Amersham and Pharmacia Corporation. The Company will then offer a portion of its
common stock to the public in the IPO. The proceeds of the offering will be used
for general corporate purposes, primarily to fund operations and to repay
existing indebtedness of APBiotech Ltd. to Nycomed Amersham, with any remaining
proceeds placed on deposit with Nycomed Amersham and available as required by
the Company.

The Company will pay all fees and expenses related to its organization and
operations, the acquisition of APBiotech Ltd., and the IPO and be responsible
for all debts and other obligations of the Company and APBiotech Ltd.

F-52
<PAGE> 156
(reserved for prospectus back cover)
<PAGE> 157
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Registration fee ...................................... $ 26,400
NASD Filing fee ....................................... $ 30,500
Nasdaq National Market ................................ *
Transfer agent's fees ................................. *
Printing and engraving expenses ....................... *
Legal fees and expenses ............................... *
Accounting fees and expenses .......................... *
Blue Sky fees and expenses ............................ *
Miscellaneous ......................................... *
----------
Total ............................... $ *
==========
</TABLE>

----------

Each of the amounts set forth above, other than the Registration fee and
the NASD filing fee, is an estimate.

* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the Registrant. The
Delaware General Corporation Law provides that Section 145 is not exclusive of
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors or otherwise.
Section __ of the Registrant's Bylaws provides for indemnification by the
Registrant of its directors, officers and employees to the fullest extent
permitted by the Delaware General Corporation Law.

Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. The Registrant's Certificate of Incorporation
provides for such limitation of liability.

The Registrant maintains standard policies of insurance under which
coverage is provided (a) to its directors and officers against loss rising from
claims made by reason of breach of duty or other wrongful act, and (b) to the
Registrant with respect to payments which may be made by the Registrant to such
officers and directors pursuant to the above indemnification provision or
otherwise as a matter of law.

The proposed forms of Underwriting Agreement filed as Exhibit 1 to this
Registration Statement provide for indemnification of directors and officers of
the Registrant by the underwriters against certain liabilities.

II-1
<PAGE> 158
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since three years before the date of the initial filing of this
Registration Statement, the Registrant has not sold any securities without
registration under the Securities Act of 1933:

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed as part of this Registration
Statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
---------------------------------------------------------------
<S> <C>
*1 Form of Underwriting Agreement

3.1 Certificate of Incorporation

*3.2 Restated Certificate of Incorporation, to be effective
immediately prior to the closing of this offering

3.3 Bylaws

*3.4 Restated Bylaws, to be effective immediately prior to the
closing of this offering

*4.1 Form of Common Stock Certificate

*4.2 Shareholders' Agreement, to be effective immediately prior to
the closing of this offering

*5 Opinion of Davis Polk & Wardwell

10.1 General Services Agreement between Amersham International plc
and Amersham Pharmacia Biotech Limited dated August 4, 1997

10.2 Contract Manufacture Agreement between Amersham International
plc and Amersham Life Science Limited for Amersham
Laboratories dated August 4, 1997

*10.3 Contract Manufacture Agreement between Amersham International
plc and Amersham Life Science Limited for Cardiff dated August
4, 1997, as amended ________, 2000

10.4 Lease and Guaranty between MP Argues, Inc. and Molecular
Dynamics, Inc. dated November 30, 1999

10.5 Lease Agreement between Giffra Ranch and Molecular Dynamics
dated December 1, 1999

*10.6 Stock Option Plans

**10.7 License Agreement between the Perkin-Elmer Corporation and
Amersham International plc dated April 1, 1996

**10.8 License Agreement between the Regents of the University of
California and Molecular Dynamics dated September 15, 1993

**10.9 License Agreement between the Regents of The University of
California and Amersham Life Science Inc. dated October 1,
1995, as amended April 2, 1998

**10.10 License Agreement between the Regents of The University of
California and Molecular Dynamics dated January 16, 1991, as
amended February 10, 1993 and May 15, 2000

**10.11 License Agreement between the President and Fellows of Harvard
College and Amersham Pharmacia Biotech Inc. dated January 1,
1999

*10.12 Support Agreement among Nycomed Amersham plc, Pharmacia
Corporation, APBiotech Inc and Amersham Pharmacia Limited
dated September 28, 2000.

21 Subsidiaries of the Registrant

23.1 Consent of PricewaterhouseCoopers LLP

23.2 Consent of PricewaterhouseCoopers LLP

23.3 Consent of PricewaterhouseCoopers

*23.4 Consent of Davis Polk & Wardwell (included in Exhibit 5)

24.4 Power of Attorney (included on signature page)

27.1 Financial Data Schedule
</TABLE>
----------
* To be filed by amendment

II-2
<PAGE> 159
** Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant's
application requesting confidential treatment under Rule 406 of the
Act, filed on October 2, 2000

(b) Financial Statement Schedules

ITEM 17. UNDERTAKINGS

The undersigned hereby undertakes:

(a) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement certificates
in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions referenced in Item 14 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered hereunder,
the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 160
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Piscataway, State of New
Jersey, on the 2nd day of October, 2000.

APBIOTECH INC

By /s/ ANDREW CARR
---------------------------
Name: Andrew Carr
Title: Chief Executive Officer
<PAGE> 161
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Andrew Carr, Giles Kerr, and Nicola Smith, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and any and all additional
registration statements pursuant to Rule 462(b) of the Securities Act of 1933,
as amended, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agents full power and authority to
do and perform each and every act in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or either of them or their or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ ANDREW CARR
------------------------
Andrew Carr Chief Executive October 2, 2000
Officer, Director

/s/ PER-ERIK SANDLUND
------------------------
Per-Erik Sandlund Chief Financial October 2, 2000
Officer

/s/ PER-ERIK SANDLUND
------------------------
Per-Erik Sandlund Controller or Principal October 2, 2000
Accounting Officer

/s/ SIR WILLIAM CASTELL
------------------------
Sir William Castell Director October 2, 2000

/s/ RON LONG
------------------------
Ron Long Director October 2, 2000

/s/ GILES KERR
------------------------
Giles Kerr Director October 2, 2000

/s/ CHRISTOPHER COUGHLIN
------------------------
Christopher Coughlin Director October 2, 2000

/s/ MATS PETTERSSON
------------------------
Mats Pettersson Director October 2, 2000
<PAGE> 162
EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
--------------------------------------------------------------

*1 Form of Underwriting Agreement

3.1 Certificate of Incorporation

*3.2 Restated Certificate of Incorporation, to be effective
immediately prior to the closing of this offering

3.3 Bylaws

*3.4 Restated Bylaws, to be effective immediately prior to the
closing of this offering

*4.1 Form of Common Stock Certificate

*4.2 Shareholders' Agreement, to be effective immediately prior to
the closing of this offering

*5 Opinion of Davis Polk & Wardwell

10.1 General Services Agreement between Amersham International plc
and Amersham Pharmacia Biotech Limited dated August 4, 1997

10.2 Contract Manufacture Agreement between Amersham International
plc and Amersham Life Science Limited for Amersham
Laboratories dated August 4, 1997

*10.3 Contract Manufacture Agreement between Amersham International
plc and Amersham Life Science Limited for Cardiff dated August
4, 1997, as amended ________, 2000

10.4 Lease and Guaranty between MP Argues, Inc. and Molecular
Dynamics, Inc. dated November 30, 1999

10.5 Lease Agreement between Giffra Ranch and Molecular Dynamics
dated December 1, 1999

*10.6 Stock Option Plans

**10.7 License Agreement between the Perkin-Elmer Corporation and
Amersham International plc dated April 1, 1996

**10.8 License Agreement between the Regents of the University of
California and Molecular Dynamics dated September 15, 1993

**10.9 License Agreement between the Regents of The University of
California and Amersham Life Science Inc. dated October 1,
1995, as amended April 2, 1998

**10.10 License Agreement between the Regents of The University of
California and Molecular Dynamics dated January 16, 1991, as
amended February 10, 1993 and May 15, 2000

**10.11 License Agreement between the President and Fellows of Harvard
College and Amersham Pharmacia Biotech Inc. dated January 1,
1999

*10.12 Support Agreement among Nycomed Amersham plc, Pharmacia
Corporation, APBiotech Inc and Amersham Pharmacia Limited
dated September 28, 2000.

21 Subsidiaries of the Registrant

23.1 Consent of PricewaterhouseCoopers LLP

23.2 Consent of PricewaterhouseCoopers LLP

23.3 Consent of PricewaterhouseCoopers

*23.4 Consent of Davis Polk & Wardwell (included in Exhibit 5)

24.4 Power of Attorney (included on signature page)

27.1 Financial Data Schedule

----------

* To be filed by amendment

** Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant's
application requesting confidential treatment under Rule 406 of the
Act, filed on October 2, 2000