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FDA Panel Recommends Approval Of DEFLUX in USA.

Business Editors & Health/Medical Writers

UPPSALA, Sweden--(BUSINESS WIRE)--Oct. 23, 2000

At a meeting with the advisory body to the FDA, the American regulatory authority, in Washington on October 19, it was decided to recommend the approval of DEFLUX, Q-Med's product for the treatment of vesicoureteral reflux in children.

In July, Q-Med submitted a pre-market approval (PMA) application in USA for the registration of DEFLUX for the treatment of vesicoureteral reflux (VUR) in children. The processing of the product by the FDA, the American regulatory authority, has been given priority, so-called "expedited review" status. At a meeting in Washington last Thursday, the FDA's advisory body, consisting of experts in the field, decided to recommend that the FDA approve the product with certain conditions.

This decision constitutes a recommendation, that is the FDA can still decide not to follow the opinion of its advisory body. However, Q-Med sees the decision as very positive news, which strengthens the company's opinion that approval may be expected during 2001.

The recommendation is conditional (so-called conditional approval), which means that the panel has recommended that Q-Med must submit certain supplementary information regarding the clinical investigations which underlie the recommendation to approve. Furthermore, the panel has also recommended that Q-Med must carry out certain clinical investigations when the product has begun to be marketed, so-called post-marketing surveillance. Finally, the product information and labelling must be adapted to American standards.

Q-Med sees the conditions which have been laid down as completely natural and in the judgement of the company the supplementary work can be carried out as required.

DEFLUX

DEFLUX has already received approval for sales in Europe for two indications, the treatment of VUR in children and stress urinary incontinence in women. The product is a copolymer between NASHA and dextranomer. NASHA (Non-Animal Stabilized Hyaluronic Acid) is the technology which is the base for all of Q-Med's products. Dextranomer is a crosslinked polysaccharide that promotes the natural formation of connective tissue, which is necessary in order to prolong the volume- creating effect of DEFLUX.

VUR

Vesicoureteral reflux, VUR, is a condition primarily in small children which leads to urine leaking from the urinary bladder back into the kidneys via the ureter, which in the long term can lead to irreversible kidney damage. DEFLUX is injected using the keyhole technique into the wall of the urinary bladder in order to improve the valve mechanism at the opening of the ureter. This method can spare many children a major operation or the cost and trouble of years of treatment with antibiotics. VUR occurs in approximately 1% of all children and about half of these need treatment of some kind. An estimate of the current world market for endoscopic treatment of VUR is more than SEK 100 million (approximately USD 10 million) per year. Q-Med's product for VUR is today sold in more than 10 markets, primarily in Europe.

The FDA, the American regulatory authority

DEFLUX for the indication VUR is the first product for which Q-Med is applying for approval in USA. Products which are sold in USA must be produced in accordance with the American GMP-QSR standard (Good Manufacturing Practices -- Quality System Regulations). During the year Q-Med has carried out intensive work to bring the company into line with this standard.

Before the FDA (Food and Drug Administration), the American regulatory authority, has approved a so-called pre-market approval (PMA) application for a product, it may not be marketed or distributed.

Oct. 23, 2000

Uppsala, Sweden

Q-Med AB (publ)

Per Olof Wallstrom

President and CEO

Queries should be addressed to Per Olof Wallstrom, President and CEO, on +46(0)18-474 90 00 or +46(0)70-974 90 70.

Q-Med is a rapidly growing and profitable biotechnology and medical device company that develops, produces and markets medical implants. All products are based on the company's patented technology for the production of NASHA -- Non-Animal Stabilized Hyaluronic Acid. Q-Med's operations focus on four areas, Esthetics, Orthopedics, Uro-Gynecology and Cell Therapy and Encapsulation. The products RESTYLANE, RESTYLANE Fine Lines and PERLANE are used for the filling out of lips and facial wrinkles and today account for the majority of sales. The development of MACROLANE for breast augmentation is ongoing. DUROLANE, Q-Med's product for the treatment of osteoarthritis in the knee-joint, is in the clinical documentation phase. DEFLUX is a product which has been approved in Europe for the treatment of vesicoureteral reflux (malformation of the urinary bladder) in children and stress urinary incontinence in women. Since July 2000 Q-Med has held a majority interest in the American biotechnology company Ixion Biotechnology Inc., which carries out research within cell therapy for diabetes. Q-Med today has 175 employees, with 125 at the company's production facility and head office in Uppsala, 10 at Ixion and the remainder in wholly owned foreign subsidiaries. The Q-Med share has been listed on the O-list of the OM Stockholm Stock Exchange since December 1999.

Q-Med AB (publ), Seminariegatan 21, SE-752 28 Uppsala, Sweden. Corporate identity number 556258-6882.

Tel: +46(0)18-474 90 00. Fax: +46(0)18-474 90 01. E-mail: info@q-med.com. Home page: www.q-med.com

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