Varian Medical Systems, Inc. to Acquire MDS Nordion's High Dose Rate - HDR - Brachytherapy Business.

Business/Health Editors

Acquisition Gives Varian Medical Systems the Broadest Line

of Products for HDR Brachytherapy Customers

Varian Medical Systems, Inc., (NYSE:VAR) today announced an agreement to acquire MDS Nordion's (NYSE:MDZ, TSX:MDS) business for HDR brachytherapy -- a minimally invasive procedure for eradicating cancerous tumors with radiation. The acquisition will expand Varian Medical Systems' capability to offer hospitals and free standing clinics a complete range of HDR brachytherapy services and products, including the MDS Nordion line of GammaMed(TM) afterloaders. Varian Medical Systems will pay approximately $11 million in cash for the business.

"Coupled with Varian Medical Systems' existing successful brachytherapy business, this acquisition enables our company to offer customers the broadest range of delivery systems and applicators for HDR brachytherapy and significantly strengthens our ability to serve international markets -- particularly Europe," said Dick Levy, president and CEO of Varian Medical Systems. "We will have products for all price ranges, a wide array of applicators for every clinical need, and an installed base of more than 550 clinics that form the foundation for a strong service business with a global reach. We gain some natural synergies in which more products and services can be offered to customers of both businesses."

"The sale of our HDR brachytherapy business allows MDS Nordion to focus on our comprehensive Oncentra(TM) suite of oncology treatment planning, record and verify and information management products as well as the Theratron(TM) teletherapy and Gammacell(TM) blood irradiator product lines," says Ken Johnson, Senior Vice President, Oncology Software Solutions, MDS Nordion. "We will be working together with Varian Medical Systems to ensure a smooth transition for those customers who use GammaMed(TM) products."

Varian Medical Systems currently supplies its advanced SmartSeed(TM) system, incorporating the VariSource(TM) afterloader and the company's BrachyVision(TM) 3D treatment planning software for very precise, image-guided HDR brachytherapy. The acquisition will add two afterloader models -- the three channel GammaMedplus(TM) 3/24 and the 24-channel GammaMedplus -- that will be available at low- and mid-range prices with 2D, applicator-based planning systems.

"We will offer customers a choice of delivery systems and a selection of more than 100 clinically proven applicators," said William Hyatt, vice president and general manager of Varian Medical Systems' brachytherapy business unit, which operates within the company's Ginzton Technology Center. Through the combined business, Varian Medical Systems will offer brachytherapy delivery systems, radioactive sources, applicators, treatment planning software, and service.

Brachytherapy is the delivery of radiation therapy through the placement of one or more tiny radioactive sources in or around a cancerous tumor. The technique is designed to deliver a large dose of radiation to the tumor while sparing surrounding healthy tissue, often as a boost to external beam radiotherapy treatments or as a primary treatment for other diseases such as gynecological cancers. Radioactive sources are placed within the tumor through catheters or rigid applicators that have been inserted into the treatment site. HDR brachytherapy uses a robotic device, or afterloader, to transport a wire with a high-energy, radioactive source on it's tip, through a catheter to the tumor site. The wire with the radioactive source is moved, under computer control, within the catheter, thereby delivering a specified dose distribution. The wire is then withdrawn into the afterloader.

HDR brachytherapy is becoming a more important modality for the growing number of cancer cases throughout the world. It is being used to treat almost all intracavitary and intraluminal sites, including prostate, gynecological, cervix, lung, esophagus, rectum, bile duct, nasopharynx, and breast cancers.

Varian Medical Systems is the world's leading supplier of non-invasive systems for treating cancer with external beam radiation, including SmartBeam(TM) IMRT (intensity modulated radiation therapy). "By expanding our technology and product offerings for both external beam radiotherapy and brachytherapy, we expect to address all clinical needs for radiation therapy," said Levy. Radiation therapy is used to treat more than half of all cancer patients in the United States.

Together with Varian Medical Systems' existing business, this acquisition will result in a $30-35 million annual brachytherapy business for the company. The company expects the acquisition to be neutral for the remainder of fiscal 2002 and slightly accretive in fiscal 2003. The transaction is expected to be closed by mid-July and is not subject to any pre-closing regulatory filings.

Varian Medical Systems or MDS Nordion brachytherapy customers who want additional information regarding this transaction, products and services should call 888-666-7847.

Varian Medical Systems, Inc. (NYSE:VAR) of Palo Alto, California, is the world's leading manufacturer of integrated cancer therapy systems as well as X-ray tubes and flat-panel sensors for imaging in medical, scientific, and industrial applications. Varian Medical Systems employs approximately 2,600 people and reported sales of $774 million in its most recent fiscal year ended September 28, 2001. For more information, visit www.varian.com.

MDS Nordion (www.mds.nordion.com) is a global healthcare company specializing in radioisotopes, radiation, and related technologies used to diagnose, prevent and treat disease. The company is part of MDS Inc. (TSX: MDS; NYSE: MDZ) an international health and life sciences company. In many of its products and services, it is among the largest and most respected companies in the world. MDS's focus is on advancing health through science. It does this by providing: laboratory testing, imaging agents for bnuclear medicine testing, sterilization systems for medical and consumer products, research services to speed discovery and development of new drugs, therapy systems for planning and delivery of cancer treatment, analytical instruments to assist in the development of new drugs, and medical/surgical supplies. MDS employs more than 10,000 highly skilled people at its global operations on five continents. Detailed information about the company is available at the MDS Web site at www.mdsintl.com or by calling 1-888-MDS-7222, 24 hours a day.

Forward Looking Statements:

Except for historical information, this news release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning industry and market outlook, including market acceptance of or transition to products or technology for the delivery of high dose rate brachytherapy, and the outlook for certain geographic regions and markets; growth drivers; our orders, sales, backlog, or earnings growth; future financial results and any statements using the terms "will," "should," "estimated," "expect," or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include demand for our products; our ability to develop and commercialize new products; the impact of competitive products and pricing; the effect of economic conditions and currency exchange rates; our ability to maintain or increase operating margins; our ability to meet demand for manufacturing capacity; our ability to protect our intellectual property; our reliance on sole or limited source suppliers for key components of our products; the impact of managed care initiatives or other health care reforms on capital expenditures and/or third-party reimbursement levels; our ability to meet FDA and other regulatory requirements or product clearances; the potential loss of key distributors; the possibility that material product liability claims could harm future sales or require us to pay uninsured claims; the effect of changes in accounting principles; the risk of operations interruptions due to events beyond our control; and the other risks listed from time to time in our filings with the Securities and Exchange Commission. We assume no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.