Lohmann & Rauscher

L&R has acquired the worldwide business and all rights to Xylos Corporation’s microbial cellulose technology for wound care. This asset acquisition represents a further step towards the strengthening of L&R´s R&D competence and market position in Modern Wound Care. L&R has acquired from Xylos its patented technology for the utilization of microbial cellulose in wound care together with the corresponding manufacturing capabilities and world wide marketing and distribution rights.

On March 1, 2007 L&R, an international leading supplier of medical devices, acquired the activities and rights of U.S. based Xylos Corporation (Langhorne, PA) in the field of modern wound care products made of microbial cellulose. Since 2006 L&R has been marketing these products very successfully in Europe under the brands “Suprasorb® X” and “Suprasorb® X+PHMB”“. In North America, these same products are currently marketed under the brand name XCell® and XCell® Antimicrobial Dressings, and L&R obtained rights to these products and market as part of the asset acquisition.

Dr. Helmut Leuprecht, President & CEO of the L&R corporate group commented: “This new expansion of the know-how and technology base into the field of microbial cellulose represents a further milestone in the strengthening of the position of L&R in the market and of its ability to expand its Modern Wound Care developments. It follows on from the acquisition in 2005 of UK based Speciality Fibres and Materials Limited, a manufacturer of biomaterials and X-ray detectable fibres used for medical purposes. L&R expects many important opportunities for further development of this promising, future-oriented product segment”.

Mark McNulty, CEO of Xylos, commented: “L&R is the ideal acquirer of our worldwide wound care assets. The addition of this important technology and products to L&R’s portfolio will provide a basis for L&R’s continued growth and leadership in the competitive modern wound care market for many years to come. Xylos may now focus its full resources on the development of its proprietary biocellulose-based surgical products.”

Suprasorb® X and the antimicrobial version, Suprasorb® X+PHMB (polyhexanide), are unique HydroBalanced wound dressings which are able to recognize whether it is necessary to release moisture from the dressing or to absorb surplus exudates from the wound or both simultaneously (HydroBalance principle). This feature contributes to effective wound treatment and considerably reduces pain for the patient throughout the length of the treatment. Due to the innovative structure of this material, Suprasorb® X and Suprasorb® X+PHMB are particularly soft and pliable, allowing the wound dressings to conform easily to every shape of the wound. This complies with the requirements of the users for a safe wound dressing with ease of handling and the ability to be used for a broad range of wound care needs.

Further details concerning this transaction have not been disclosed by the parties.

Lohmann & Rauscher / L&R, headquartered in Rengsdorf (Germany) and in Vienna (Austria), supplies medical devices and systems under the brand “L&R“, in more than 80 countries and focuses its activities in the core business segments of Wound Care, Bandages & Supports and Set Systems & Hygiene. Furthermore, products for cosmetics and female hygiene are marketed under the label of “Rauscher Consumer Products“. The L&R network comprises subsidiaries in 17 different countries with over 3,000 employees and more than 30 distributors´ world wide.

Xylos Corporation, headquartered in Langhorne PA, is a medical device company with a patented, innovative biomaterials platform targeting a broad range of medical applications. Xylos is dedicated to delivering superior biomaterials solutions for the treatment, repair and replacement of human tissue without the risks, complications and limitations inherent in animal, human and synthetic alternatives. Following the acquisition of its wound care business, Xylos retains a robust product pipeline of implantable medical devices, and is accelerating its current development activities to deliver a series of innovative products for musculoskeletal repair.

Vienna / Langhorne, March 8, 2007