MDS Pharma Services Acquires Early Clinical Research Facility in New Orleans

Montreal, Canada. June 27, 2003

MDS Pharma Services, a leading provider of innovative drug discovery and development solutions, is expanding the scale and scope of its early clinical research business with its acquisition of The Clinical Research Center, a Phase I-IV study facility in New Orleans, Louisiana, specializing in renal, hepatic, hypertension, diabetes, acute pain and osteoarthritis research. Jerry Merritt, Sr. Vice President and General Manager of Early Clinical Research, said the acquisition enhances the company's capabilities in specialized patient populations while further establishing MDS Pharma Services' position as the largest early clinical research provider in the industry with more than 900 beds.

"This acquisition provides us with patient study capabilities that we do not currently offer plus increased capacity for our normal healthy studies," said Merritt. "In addition, the clinic is operated by a knowledgeable, reputable staff and is well-established in the community."

The 16,000-square-foot facility, located near both Louisiana State University Medical Center and Tulane University School of Medicine, was completed last year and can support 80 to100 early clinical research beds. Dr. F. Gilbert McMahon founded the Clinical Research Center in 1968 while he served as Head of Therapeutics at Tulane.

"Though MDS Pharma Services is a global organization, the company understands and promotes the local perspective of each of its facilities," said Dale Kaliszeski, site manager. "This is a positive step for our facility and for the community at large, providing us with additional prospects for growth and technological enhancements that will benefit our clients."

"No other clinics in the area recruit normal healthy volunteers for early clinical studies," said Merritt. "We anticipate being able to manage both specialized patient and healthy volunteer studies at the facility and look forward to the synergistic benefits of running both types side-by-side."

MDS Pharma Services operates seven early clinical research facilities in North America and Europe and last year expanded or relocated four of them, said Gilbert Godin, Group Vice President, Early Stage Development. "We constantly look for opportunities to continue our planned growth, respond to increasing demand by our clients for additional capacity and for the chance to work with unique study types, such as patients with compromised renal function and hepatic insufficiency," he said.

MDS Pharma Services offers a full spectrum of resources to meet the drug discovery and development needs of the pharmaceutical and biotechnology industries. With numerous facilities strategically located around the world, the company applies advanced scientific and technological expertise to each stage of the drug discovery and development process - early stage: lead optimization, pre-IND research and development, pharmaceutical and biopharmaceutical development, early clinical research (bioequivalence, phases I-IIa) and bioanalysis; and late stage: global clinical development (phases IIb-IV) and central lab.

MDS Pharma Services 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 is focused on enhancing the health of people around the world. It does this by providing laboratory testing, imaging products and research services to speed discovery and development of new drugs, therapy systems for planning and delivery of cancer treatments, analytical instruments to assist in the development of new drugs, and medical/surgical supplies. MDS employs more than 11,000 highly skilled people in 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.

Principals of Fairmount Partners acted as advisors to the management group in this transaction.

Contact:

Cornelius "Neal" P. McCarthy and Roy Delizia