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Media Release Siegfried – when substance matters Semi-annual report 2008 Semi-annual report 2008 Siegfried Posts Growth Despite Negative Currency Influence During the first half of 2008, the Siegfried Group (SWX: SFZN) achieved revenues of CHF 159.6 million, an increase of 6.8% in local currencies and, as a result of the declining U.S. dollar, 1.2% in Swiss francs. Operating profit (EBIT) reached CHF 28.5 million (+33.2%). The sale of the pharmaceutical production facility in Zofingen to the U.S.-based Arena Pharmaceuticals and license payments for a previous bio-generic project both contributed to the positive results. Siegfried Actives Division The Division increased production during the first six months compared to 2007 and markedly upped utilization levels. Due to customer postponements of deliveries to the second half of 2008, the Division results of CHF 95.1 million remained below the 2007 results (12.7% in Swiss francs and 4.9% in local currencies). Operating profit (EBIT) amounted to CHF 1.7 million, clearly lower than last year. One reason for the comparative shortfall is the one-time payment of CHF 9.1 million made by U.S.-based Celgene during the first half of 2007 for a reactor system. The Siegfried Actives Division sells a substantial part of its production to U.S. dollar regions, which strongly impacted both revenues and operative results; leaving a 7.8% currency-influenced difference in revenues. Good order inflow For the Siegfried Actives Division, the rate of incoming orders remains solid. Last year, 20 new exclusive synthesis projects were won; during the first half of 2008, six more projects were added, and we await decisions on various promising offers. The pipeline for exclusive synthesis currently has 8 projects for pharmaceuticals that have already been launched by the customer. Further 6 projects are in the clinical phase III, and 26 projects are in phases I or II. 81926011 1 Seite 2 Two products are about to go into ramp-up of production that will add to the 2008 results and be a key growth factor in 2009. Successful standard products The expansion of standard product activities (incl. controlled substances) continues. Primarily, this includes a range of opiate-based substances for powerful analgesics used in cancer therapies. New substances are continually being brought to commercial production. In addition to the U.S. market, interest for opiate derivatives is also growing markedly in the Canadian and European markets. Sales of the active pharmaceutical ingredients methadone and nicotine, where Siegfried Actives is the market leader, continue to develop well. Currently, Siegfried Actives is working to expand its product range of nicotine derivatives. Siegfried Generics Division Siegfried Generics developed well during the first six months of 2008 and achieved revenues of CHF 64.6 million (+32%). The CHF 30.3 million EBIT was bolstered by the sale of the pharmaceutical facility in Zofingen to Arena Pharmaceuticals in San Diego. Operating profit was CHF 16.7 million, which includes licensing income for a successfully completed - bio-generics project. Generics in new dosage forms After the sale of the production facility in Zofingen, the production of generics (in solid dosage forms) will be successively transferred to Malta. In addition, new dosage form projects will supplement the pipeline; these will be carried out in cooperation with industry partners. The generics pipeline now has 13 projects, including 3, which are already in the registration phase. The remaining projects are in the evaluation phase. Rapid development of the inhalation technology Development work on generic inhalation products used for asthma therapy is moving along vigorously. A new GMP production facility in Höchstädt, Germany was found for the manufacture of inhalation drugs based on the PulmoJet®. The development lab in Munich was updated and continues to grow. The inhalation technology costs were charged to the profit & loss statement. Discussion with potential marketing partners in the U.S.A. and Europe are now underway. Initial cost sharing solutions, especially for a project targeting the U.S. market, are expected already in 2009. Seite 3 Outlook The Siegfried Group expects the Siegfried Actives Division to achieve markedly better sales for the second half of 2008 – despite the negative U.S. dollar pull – and this trend might continue into the next year. A key reason for this optimism is the expected ramp-up for two larger customer projects, scheduled for the end of the year. These active pharmaceutical ingredients might also have a positive influence on margins in 2009. The competitive situation will become increasingly noticeable for the Siegfried Generics Division, resulting in declining revenues for the second half of 2008. Nevertheless, the Siegfried Group sees single digit growth for the year. Due to the weakness of the U.S. dollar and ongoing investments in the inhalation technology, operating margins might drop slightly below 10%. Net profit should remain solid, thanks to the abovementioned special factors. Zofingen, 27 August 2008 For further information: Dr. Richard Schindler, Chief Financial Officer der Siegfried-Gruppe Tel. +41 (0)62 746 11 35, Fax +41 (0)62 746 11 03 Siegfried Holding AG Untere Brühlstrasse 4 CH - 4800 Zofingen Phone + 41 62 746 11 11 Fax + 41 62 746 11 04 www.siegfried.ch About Siegfried Active in Life Science markets, the Siegfried Group is a global manufacturer of pharmaceutical products with production facilities located in Switzerland, Germany, Malta and the US.A. Siegfried currently has approximately 900 employees and achieved annual sales of approx. CHF 318 million in 2007. Siegfried has two pharmaceutical divisions. Siegfried Actives develops and produces both exclusive active pharmaceutical ingredients (API) and cGMP and non-cGMP intermediates for the pharmaceutical industry, and standard APIs. Siegfried Generics produces complex generic products. Siegfried Holding AG is listed on the Swiss Exchange in Zurich (SWX: SFZN).