RESEARCH AND DEVELOPMENT

Fresenius centers its R & D efforts on its core activities. These are:

• dialysis and other extracorporeal therapies
• infusion and nutrition therapies and related medical devices
• antibody therapies.

Apart from products, we are concentrating on optimizing or developing completely new therapies, treatment methods, and services. In 2008, we successfully continued numerous projects, and several new products were launched.

Fresenius Medical Care continued to work hard to improve dialysis therapies. One project was the further development of the 5008 hemodialysis machine; the successor product 5008S was launched in 2008. In the field of home dialysis, our development work was primarily on a machine for automated peritoneal dialysis – a so-called cycler – for global use. Our overall goal is to offer high-quality peritoneal dialysis worldwide at optimized cost.

Fresenius Kabi concentrated on developing new products and product enhancements in its core areas of infusion therapy, clinical nutrition, IV drugs, and medical devices. Attention was centered on IV drugs, where we are working on filing dossiers for approval in and outside Europe. In 2008, we submitted the dossiers for 11 products to the European regulatory authorities. With the acquisition of APP Pharmaceuticals and Dabur Pharma, we have significantly expanded our R & D capabilities in this product segment. We began rolling out the Dabur products internationally last year. Dabur Pharma is a leading supplier of generic drugs and active agents for cancer treatment. In clinical nutrition, we submitted dossiers for the approval of SMOFlipid^®, a lipid emulsion, for pediatric use in 2008. The approval process for SMOFKabiven^® was completed. In enteral clinical nutrition, we continued our work on the development of a product line for dysphagia patients.

Important projects at Fresenius Biotech involved trifunctional antibody therapies: Fresenius Biotech has dispatched the marketing authorization application for Removab^®, used for the indication of malignant ascites, to EMEA, the European Medicines Agency, at the end of December 2007. In February 2009, EMEA’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending approval of Removab^® .

Expenditure for research and development was € 479 million in 2008 (2007: € 184 million). This amount includes € 272 million of acquired R & D activities from the acquisition of APP Pharmaceuticals. As in 2007, excluding this special item, we invested about 5% of our product sales in R & D. The pie chart shows the R & D figures by business segment. In 2008, Fresenius Medical Care increased R & D spending by 12% and Fresenius Kabi by 27%. In the segment Corporate/Other R & D, € 43 million were expended on the clinical development of trifunctional antibodies at Fresenius Biotech. Detailed figures are included in the segment reporting.